What to make of the agricultural commodities diary?

It is approaching one of those congestion points, and not just because the end of September is looming, the end of both a month and a quarter.

Such times are often seen as encouraging funds to close positions, and take out money for paying out clients and staff, with periods beginnings seen as times of cash inflows.

Data confusion

But for grains and oilseeds especially, there is more at stake.

Friday will bring the quarterly US crop stocks report, for inventories September 1, which investors are looking to for clues on just how significantly high prices are rationing domestic demand.

Stocks reports are closely watched, although the usefulness of this one looks set to be eroded somewhat by the early harvest, seen likely to cause confusion as some early harvest substitutes new crop for old in demand.

"Some are looking for a higher stocks number, especially from corn, as harvest is at a record pace, and possibly have new mingled with old," Mike Mawdsley at Market 1 said.

Yield forecasts

A clearer picture is expected to be gained on October 11, when the US Department of Agriculture unveils its monthly Wasde crop report, which promises to be a big one, in likely revealing fresh estimates for sowings and harvested acres, besides updated estimates for yields.

And the USDA yield forecast for soybeans could see a marked improvement on the 35.3 bushels per acre that the last Wasde unveiled, with late rains believed to sparked a marked improvement in crop condition.

"Some are pencilling national yields as much as 3 bushels per acre better, with production estimates increasing 250m bushels," Kim Rugel at Benson Quinn Commodities said.

Timing the lows

Also to factor into the calendar is the prospect at the end of October of the start of the expiry process for the November soybean contract, an event which while some way away will have a more immediate impact on values.

"The long term buy-and-hold funds will start liquidating out of the November contract in earnest next week," Ms Rugel said, noting that with open interest for the lot represented nearly 45% of total open contracts for the oilseed.

And next week has another significance, in potentially seeing an end of the chatter of harvest pressure and the ramp up in supplies which has pressed corn and soybean values from highs earlier in the summer.

"Typically, harvest lows are scored the first week of October," she said.

"End-users looking to add to coverage will be trying to time those lows with producer expected to lock away any beans that were not hauled to town as they shift to corn harvest, winter wheat planting and fall field work."

Markets drop

How to play all this?

The default move for crops was down, with funds more or less still in liquidation mood (they bought an estimated 1,000 soybean lots in the last session, but remain down 5,000 for the week, and 6,000 contracts in corn) and harvest pressure still holding sway.

Furthermore, broader markets were in poor form, with economic growth concerns back on the rise, and prompting declines in shares as well as commodities such as copper and crude.

Tokyo shares tumbled 2.0%, while Shanghai stocks dropped 1.2% to within an ace of their lowest since February 2009.

The dollar edged 0.3% higher, in a sign of investor caution, and eroding further the case for dollar-denominated exports such as many crops, making them more expensive to buyers in other currencies.

'All eyes on Russia'

And in Chicago, soybeans edged 0.9% lower to \$15.97 ¼ a bushel as of 09:15 UK time (03:15 Chicago time).

A close below \$16 a bushel would be the first for a near-term Chicago soybean contract since early July.

Corn for December lost 0.4% to \$7.41 a bushel.

Which all pressed on wheat too, which fell 0.7% to \$8.80 ½ a bushel, although it has a more immediate date in the calendar – today – when Egypt's Gasc authority unveils the results of its latest grains tender.

With Russia looking increasingly sidelined by a dearth of exportable supplies, following a drought-hit harvest, this tender is seen as likely to go largely to French wheat, with a small chance of a US victory.

However, traders will be keenly watching to see just how significantly the tap on Black Sea supplies has been turned off, and the relative competitiveness of alternative origins.

"All eyes will be on the value of Russian offers. In recent weeks Russian wheat values have appreciated markedly, boosting global wheat values," Luke Mathews at Commonwealth Bank of Australia said.

Palm slips

The decline made themselves felt in Kuala Lumpur too, where palm oil for December dropped 1.2% to 2,636 ringgit a tonne, if just remaining above two-year lows reached on Monday.

The vegetable oil, of which China and Europe are major importers, is particularly prone to jitters over the economies of these areas.

And rival vegetable oil soyoil had a poor performance on China's Dalian exchange overnight, tumbling 1.8% to 9,348 yuan a tonne for January delivery.

Sugar's recovery

However, sugar managed to avoid widespread declines on Chinese exchanges, edging 1 yuan higher to 5,163 yuan a tonne on the Zhengzho, for January.

And raw sugar in New York made ground too, extending its recovery into a fifth session, to stand 0.6% higher at 19.97 cents a pound.

The lot has now recovered 1 cent in its rebound, which has been stoked by ideas of rain slowing the harvest in Brazil's Centre South, where industry group Unica on Tuesday revealed that maintenance shutdowns have already cut the pace of milling.