There was some hope that selling pressure on
Such ideas proved premature. Clouds over the macro picture gathered to form a torrential storm over financial markets on Tuesday, drenching anything deemed a risk asset.
It was not just the continuing jitters over Greek debt, but the return of fears over Irish borrowings, with bondholders in Irish banks looking set for a haircut, while US data showed a fall in manufacturing fortunes and a rise in core inflation to its highest in nearly three years.
Shares had a poor day. Wall Street shares were down some 1.7% in late deals, after London stocks closed down 1.0%.
Stock in raw materials giant Glencore slumped 5.4% to end at 473p, more than 10% below their issue price of 530p. So much for leaving money on the table for investors at last month's flotation.
Still, commodities hardly looked the best sector to be exposed to, with the CRB index tumbling more than 2%. And that in turn was hardly surprising when the
Dollar rises make dollar-denominated assets that much less affordable to buyers in other currencies, and so have a strong (negative) correlation with commodity prices.
And agricultural commodities took their share of the pain even, in fact especially, corn, which this time came 0.25 cents short of, for July delivery, closing down the daily limit in Chicago.
The contract finished 3.9% down at $7.25 ¾ a bushel, its weakest finish in nearly a month.
Indeed, investors, who have a huge net long position in the grain, bailed out in droves, with funds selling an estimated 20,000 contracts, in addition to some 15,000 lots in the last session.
Sure, the US Department of Agriculture report last week looked nothing but bullish for corn. But there are signs that the assumptions that the USDA estimates were based on are changing.
Investors have turned increasingly from the slow pace of US sowings, and lost acres, to the decent weather conditions blessing what corn has been planted, outside southern areas suffering extreme heat.
"The central weather for the most part is favourable to growing conditions. This is overshadowing the problem areas," US Commodities said.
Darrell Holaday at Country Futures added: "The market is stripping all of the weather premium out of the corn market.
"That can change, but the current forecast is benign and non-threatening to the Corn Belt.
In addition, there are demand concerns too, with reports filtering in of increased substitution of corn with, especially soft red winter,
And Mr Holaday even noted talk "of an ethanol plant in the eastern Corn Belt closing down and selling their corn inventory to take advantage of the gain in basis."
"This is all part of the rationing process," he added, and as such, of course, negative for prices.
Not that wheat took that much succour with the market leader in turmoil. Chicago's July contract closing down 3.1% at a one-month low of $7.08 ½ a bushel.
And after all the US winter wheat harvest "continues aggressively", US Commodities said, noting that "yields are better than expected".
And Matthew Pierce at PitGuru clocked "information coming from Ukraine that they are looking to front run Russian wheat exports, with an estimated 7m-9m tonnes to move to the world market in the coming months".
He added: "Ukrainian weather has been more stable than Russian making their eagerness understandable."
Competition on export markets looked further heated up by Australia's upgrade to its estimates for shipments in both 2010-11 and 2011-12.
Continued spring sowing delays spared Minneapolis spring wheat from the worst of the decline, but not completely, with the July lot ending down 3.3% at $9.37 a bushel.
A weaker currency was a far better ally, as Paris wheat found in ending a more modest 1.6% lower at E215.25 a tonne, a purchase by Algeria of 350,000 tonnes of the grain (probably largely from France) helping too.
London wheat finished 1.3% down at £175.00 a tonne, offered some support by a downbeat forecast from the National Farmers Union for the English wheat crop too.
Indeed, July soybeans ended flat at $13.68 a bushel, helped by selected US weather setbacks, as US Commodities noted, saying that "double-crop soybeans need rain in the deep South".
The weakness engendered by a soaring dollar and weak macroeconomic sentiment spilled over into soft commodities too, sending
Technical considerations played a part in coffee's fall, after it failed to get anywhere near a chart point of 276 cents a pound, a failure which Jurgens Bauer at PitGuru had warned meant "the downside will come back into play".
Meanwhile, weather forecasts appeared to rule out any risk of frost for Brazilian coffee plantations, fears for which have been a big prop to prices.
New York raw
"Recent weather in the northern hemisphere may be easing drought stress on beets so outturn from this area may be higher than previously estimated," Nick Penney at Sucden Financial said, noting hopes for a rise in output in India, the second-ranked producer, too.
"Indeed, the Indian Sugar Mills Association is calling for a substantial increase in the duty free export quota in the marketing year to September 30, citing expectations of a crop yielding between 26.0m-26.5m tonnes.
"All this might suggest that the expected [world sugar] surplus will be felt in the second half of 2011 and that current structural strength may be too high."