The start to the second half of 2013 began on grain markets - with one expectation - much where the end of the first half left off.
The themes of strong old crop vs weak new crop in soybeans, and harvest pressure in wheat, certainly held sway.
The big difference was that the old crop strong-new crop weak theme failed in corn in the last couple of hours of Chicago trading, after early gain comfort in firm US export statistics.
The US shipped 14.8m bushels of the grain last week, according to cargo inspection data, a jump from less than 5.9m bushels the week before, if well below year ago levels of 22.8m bushels.
'Align with the cash'
OK, like soybeans, US Department of Agriculture data on Friday showed that US stocks of corn as of the start of last month were smaller than investors had expected, and well down year on year.
This is a reflection of the impact of firm demand after a drought-hit 2012 US harvest.
"The old crop supplies remain razor tight on soybeans and tight on corn," broker US Commodities said.
"The July futures are in delivery and are trying to move higher to align with the cash."
Wheat vs corn
While in soybeans, firm cash markets helped July futures edge 0.4% higher to $15.70 ½ a bushel, corn saw its case for elevated prices weakened severely by supplies of wheat, an alternative in many uses, lifted by the US harvest.
"Increased feeding of soft red winter wheat will occur as harvest progresses," US Commodities said, noting that wheat "has a 10% better feed value versus corn and is cheaper".
As US corn basis crumbled, so did old crop July corn futures, to close down 3.5% at $6.55 ½ a bushel.
'Positive to crop growth'
That was an even bigger drop than the new crop December lot suffered, undermined not just by the July contract and Friday's US data showing far-bigger-than-expected sowings of the grain, but by a benign US weather outlook too.
Rains forecast for the north eastern and south western Midwest and Delta "would maintain moisture for corn and soybeans", MDA said.
"Meanwhile, drier weather in the west central and north western Midwest will allow wetness there to ease, and conditions to improve for corn and soybeans."
At broker Allendale, Paul Georgy said: "The weather forecasts are positive to crop growth as temperatures will be in the 70s and 80s Fahrenheit this week with scattered showers."
'Adequate risk premium'
December corn fell 1.8% to $5.01 Ό a bushel, its lowest finish since December 2010, with new crop November soybeans also feeling a downward pull, to end down 0.7% at $12.43 ½ a bushel.
At least bulls took some comfort that these losses in corn were far smaller than those in the last session, when it tumbled on a USDA report showing that farmers had planted far more of the grain than expected.
"The market needs to keep adequate risk premium for summer weather and an early end to the growing season," US Commodities said.
"Thus $5 a bushel is the near-term support target. This is a stair step down market."
Corn also received some support from doubts over the US acreage data.
"Trade remains suspect of the corn and bean planted acreage at 97.4m and 77.7m acres respectively after the spring planting delays but these are the numbers USDA gave the market and until proven otherwise will be numbers market trades," Benson Quinn Commodities said.
'Extremely hot temperatures'
Wheat futures, meanwhile, flipped in and out of positive territory in Chicago, in behaviour deemed largely technical, and supported some spreading against corn, but not so much as to give a positive finish.
Sure, there were some other fundamentals to factor in such as US wheat exports, which came i at 26.4m bushels, according to cargo inspection data, up from 14.8m bushels the previous week.
Furthermore, there are some crop concerns too with Gail Martell warning over damage to some US crops to the south west, hit by the heatwave which has caused tragedy in western US.
There "extremely hot temperatures have caused premature ripening in hard red winter wheat that would shrink the yield," Ms Martell, at Martell Crop Projections, said.
"Dodge City Kansas has reached or exceeded 100 Fahrenheit on 10 days in June causing kernel shrivelling."
Abroad, she flagged some troubles in Russia, where "due to hot temperatures wheat is ripening prematurely" in some southern areas, with yield potential also deteriorating "sharply in recent weeks in the Central and Eastern Volga with reduced rains and ongoing heat".
'Wheat is thriving'
Still, in the Canadian prairies, "wheat is thriving from heavy rains", she said.
"Mostly, prairie small grains were reported to be in very good condition," even if wet conditions are raising disease concerns.
And there was some disagreement over the idea of disappointing winter wheat too, with Darrell Holaday at Country Futures saying that "winter wheat yields just get better. This is causing the harvest pressure expected.
"Technically, wheat is oversold and that is providing some support. But the buying is limited by the fundamental reality of lower corn and harvest pressure."
Chicago soft red winter wheat for September fell 0.4% to $6.55 a bushel.
But Kansas City-traded hard red winter wheat for September at least nudged 0.25 cents higher to $6.90 Ύ a bushel.
Test of October
Among soft commodities, raw sugar extended its decline, closing down 0.2% at 16.69 cents a pound for October delivery, now the spot contract, as investors waited to see if there was much demand around for this time period.
"We now need to see if end-users have front loaded their buying against July shipment, as they did last year," Nick Penney at Sucden Financial said.
"If this is the case, demand should slow and if weather goes back to normal in Centre South Brazil, we would expect the now-front October position to come under pressure."
Such pressure could be all the more telling given the extensive short-covering in raw sugar futures and options unveiled in weekly US regulatory data, creating scope for fresh such holdings.
"If producers were to step up pricing," ie hedge their output forward and so put downward pressure on values, "this may persuade speculators to re-enter the market on the short side", Mr Penney said.
