No sooner have speculators closed off a stack of short positions in Chicago wheat than they seem to be taking them out again.
Chicago's July lot tumbled to stand down 3.2% at $6.58 a bushel in late deals, looking for its fourth negative close in five trading days.
The selling appeared to be fuelled by a fresh rash of bets on falling prices, meaning the net long in Chicago wheat that speculators held as of a week ago following a wave of short covering may be short-lived.
"It looks like speculators looked at the net long in Chicago wheat and thought 'we have gone too far in closing short positions', and have put some back in," a London grain trader told Agrimoney.com.
There were reasons for bears to feel emboldened, after all, with rains refreshing some wheat crops in Australia, China, Russia and Ukraine that needed them.
Furthermore, the results for the US winter wheat harvest are not proving as poor as feared.
"Wheat yields in Oklahoma and early in Kansas have been very solid," Darrell Holaday at Country Futures said.
"At first blush it looks as though the additional wheat in Oklahoma, above the US Department of Agriculture estimate, may cover the losses in Kansas," where late dryness has dented expectations of the best yield in at least 30 years.
Furthermore, technicals were not encouraging, with Chicago's July lot surrendering its 10-day moving average, at a little over $6.65 a bushel, after eight successive closes above it.
And nor was corn much help, undermined by its own extraction of weather premium, following rains over some areas of the US over the weekend, and with more on its way – at a time when precipitation is needed.
"Forecast for rains and cooler temperatures in a big part of the US along with rains over the weekend in the northwest part of the Corn Belt has pressured corn values," Mr Holaday aid.
FCStone pointed to "fairly good rains across the Corn Belt over the weekend with good chances for more later this week".
At GrainAnalyst.com trader Matthew Pierce said: "Weekend rains helped in north west Iowa and Minnesota."
He added that the outlook for the Corn Belt in the six-to-10 day horizon was "not bad", if "far from perfect", with further rains in the north west and cooler temperatures.
The importance of crops getting rainfall is key, after all.
At broker Allendale, Paul Georgy said that driving through southern Illinois on Monday, "in the 90-degree- plus [Fahrenheit] heat, I saw corn and soybeans showing significant stress in some areas".
Michael Cordonnier, the respected crop scout, said, following a tour of Illinois and western Indiana: "The amount of moisture stress exhibited by the corn crop was more than I had expected, especially for late in May.
"In southern Illinois, it looked and felt like it was the middle of August. In the southern third of the state, the corn crop is suffering from severe moisture stress."
"The corn crop in Illinois could mostly overcome these problems if the weather would improve quickly."(Or be in for "some real trouble" if rains do not arrive.)
Still, corn for December was 1.5% lower at $5.13 ½ a bushel, and the old crop July lot 2.9% down at $5.62 a bushel.
It was left to
But then it was left looking more attractive by the report into investor positioning which showed speculators making further headway in reducing a net long holding, so raising the potential for buying.
And the oilseed gained help from both Australia & New Zealand Bank, which forecast "little alleviation of the tight global balance [in soybean supplies] until the first calendar quarter of 2011", and Oil World, which warned of further potential for downgrading the Argentine crop.
Signally, the group also downplayed fears of Chinese cancellations of soybean orders, coming in with a forecast for 2011-12 imports higher than the USDA's.
Bears got to many soft commodities too, helped in part by renewed weakness in the Brazilian real, which shields the biggest producer of crops such as arabica
Raw sugar for July dropped 0.5% to 19.53 cents a pound, while coffee for July dropped 1.4% to a 21-month closing low for a spot contract of 165.40 cents a pound.
Early on, "speculative and day trader buying was evident into light origin/Brazilian selling," Sucden Financial noted.
However, "as we moved through the day it wasn't this selling that pressured but buyers running out of steam and possibly patience, with day traders liquidating towards the latter part of the day".
One soft commodity which outperformed was
The bounce, after a dismal performance two weeks ago, was attributed to renewed weather concerns, after the landing of Tropical Storm Beryl into Florida, the top citrus state, issued a reminder of the potential for the hurricane season.