Where did all the buyers go?

Sure, they did make a brief reappearance early on in grains, driving both corn and wheat firmly into positive territory at one point, and later shifting their attention to resuscitating soybeans.

Indeed, there were rumours of China buying more of the oilseed on the break in prices, although attention on that country is focused on talk of accelerated sales from state inventories.

"It was believed they would sell 1m-2m tonnes, but now it is estimated they may sell 3.5m-4m tonnes," broker US Commodities said.

"This would keep Chinese values below world import levels," a major factor when the country is the top soybean buyer.

'Liquidation the story'

In fact, as Darrell Holaday at Country Futures noted, "liquidation continues to be the story of the day with technical weakness still the predominant feature, along with the fundamental reality of harvest pressure" for crops such as corn and soybeans.

However, this time it was actually New York which witnessed the most blood spilled, with its October raw sugar contract tumbling 2.9% to 19.44 cents a pound.

The sweetener lost the contrarian touch it had in the last session, when apparently down to the expiry of options it beat the fall in agricultural commodities, and was pressed on Tuesday in part by a return to ideas of a strong Brazilian crush.

Thomas Kujawa at broker Sucden Financial said: "The chat around seems to be centred on the forthcoming Unica estimates," Unica being a cane industry group which releases much-watched data on progress on sugar and ethanol output in Brazil's Centre South region.

"Recent processing progress in the Centre South, and maybe better than predicted ATR [sugar levels in cane] figures are giving the story back to the sugar bears."

'Harvest pressure mentality'

Chicago crops could not match sugar for losses, although oats tried before a late recovery trimmed its losses to 2.7% for the December contract, leaving it at \$3.74 a bushel.

Of the big three, soybeans fared worst this time, following on their limit-down close to the last session with a drop of 1.7% to two-month closing low of \$16.40 a bushel in this one, for November delivery, with the pressure from harvest supplies seen as the big depressant.

"The harvest pressure mentality is overwhelming corn and soybeans," Jerry Gidel at Rice Dairy said.

Data overnight showed the US harvests progressing apace, for both row crops, a factor which looks set to continue.

"The forecast for the US indicates few harvest delays during the balance of this week," Benson Quinn Commodities said.

"The soybean market very likely needs a sign from the cash market that they have value near these levels."

'Yields better than expected'

Instead, Paul Georgy, president of broker Allendale, noted that "cash basis late yesterday showed most areas slipping due to harvest".

And, importantly, it is a harvest which is beating some of the more downbeat expectations on quantity too.

"Yield reports continue to come in better than expected by producers," Mr Georgy said.

Indeed, of all the negative factors blamed for depressing soybean prices, from Chinese sales to wetter weather for Brazilian sowings, "the only real fundamental change is that many feel yields are better than US Department of Agriculture numbers", Country Futures' Darrell Holaday said.

Also, "harvest naturally provides a significant jolt in supply that keeps users away from panic buying", with supplies arriving earlier than some buyers had expected too to "pressure the market more than normal".

Funds sold an estimated 12,000 soybean contracts, taking their total in two days to 32,000 lots, slightly more than than their liquidation in corn. 

Funds sell more

Many of the factors depressing soybeans, such as harvest pressure and fund liquidation, were complicit too in corn's fall to its lowest close since early July on a spot contract basis.

Nor did the broader exodus from commodities help, with the CRB index down 0.9%, and a drop of some 1.8% below \$112 a barrel in Brent crude in late deals.

With ethanol plants key buyers of corn, energy prices have a large effect on the grain's demand levels.

Corn for December dropped 0.9% to \$7.40 a bushel, with funds reportedly selling a further 9,000 lots, on top of the 22,000 contracts liquidated in the last session.

'Long positions at risk'

Less probable earlier had appeared wheat's decline even further, by 1.4% to \$8.63 a bushel for December, on top of a 5% plunge in the last session, despite USDA data overnight showing sowings of winter crop in the US being held up a little by soil dryness.

Furthermore, the weather outlook for dryness-hit Western Australia turned drier – temporarily.

"Western Australia wheat forecasts turned drier overnight, but the mid-day run was back to a wetter forecast," Mr Holaday noted.

But as Richard Feltes at RJ O'Brien noted: "The wheat market knows that Australia not out of woods as yet, that Black Sea prices are trending higher and that one-quarter of the US hard red winter wheat belt us chronically dry ahead of planting.

"Bottom pickers/end users may wait until the US row crop harvest approaches two-thirds complete before probing long side.

"Until then, remaining long positions, which are still sizeable given nominal open interest declines yesterday, are at risk."

Winning contracts

If bears had hope, it was offered by cotton, which added 0.9% in New York for December delivery, following a resolute performance overnight on China's Zhengzhou exchange.

And New York arabica coffee for December gained 1.1% to 177.50 cents a pound, boosted by further short-covering encouraged by comments from Rabobank that a further drop in prices is not likely, at least in the short term.