by Agrimoney.com
Agricultural commodities may have taken some time to react to Wednesday's caution by Ben Bernanke over the potential withdrawal of easy monetary policy.
But having got the message, they signed up in duplicate to the retreat in other assets, that saw the Dow Jones industrial average share index stand a further 1.9% down in late deals, eclipsing the losses of the last session.
London shares fell 3.0%, and Paris stocks 3.7%.
The average commodity, as measured by the CRB index, fell 2.9%, little helped by the rise in the dollar too, as the prospect of the withdrawal of monetary easing reduced fears of inflation and currency erosion.
'Serious liquidity problem'
Worries over China, a huge commodity consuming country, rose too, with the release of flash estimates of the HSBC purchasing managers index for the country for June, which came in at 48.3, well into shrinkage territory (sub-50.0) and below estimates of 49.1, a figure in line with that for May.
And that is not all.
"There is a serious liquidity problem that has developed over the last three weeks in China," said Darrell Holaday at Country Futures, flagging "lots of rumours about large banks having trouble meeting their funding needs".
That hardly sounds promising for the trade finance needed to fund commodity purchases.
Mr Holaday also noted "lots of talk about lower Chinese soybean imports for the 2013-14 crop year", a prospect Agrimoney.com highlighted on Wednesday.
Real crumbles
Grains and oilseeds, then, actually came off reasonably lightly from the sell-off, even December corn in falling 1.8% to $5.60 ½ a bushel.
But the same could hardly be said for soft commodities, which felt extra pressure from a Brazilian real which weakened far more against the dollar than the average 0.7% as measured by a basket of currencies.
The real, which is a key agricultural commodity currency, thanks to Brazil's status as the top exporter of the likes of sugar and arabica coffee, tumbled more than 2% to hit R$2.27 to $1, its weakest since March 2009.
The impact on markets for these soft commodities was huge, with both suffering their biggest retreats of 2013.
Raw sugar for July delivery tumbled 3.5% to 16.38 cents a pound in New York, where arabica coffee futures for September, the best-traded lot, plunged 4.8% to 118.35 cents a pound, the weakest close for a nearest-but-one contract since July 2009.
Dome diminished
There was at least some bullish news to temper losses in grains and oilseeds although, it has to be said, one of the main props to the rally in the last session cracked when the GFS weather model withdrew the idea of a prolonged hot spell for the Midwest, which looked a potential threat to corn yields.
"The 12Z GFS continues to backtrack from the extreme forecast it had on Wednesday afternoon," WxRisk.com said.
"The model now looks almost identical to the European model. The heat dome/ridge stays in the western US in the 6-10 day and does not come east into the Midwest through July 6-7."
US Commodities said the weather maps were "more relaxed, adding that "the odds do not favour back-to-back droughts", and a repeat of last year's crop-crushing US dryness.
China factor
Still, for wheat at least there was continuing support from the idea that China is back in buying mode, after Wednesday's report of a 200,000 purchase of French grain, and with Chicago prices not too far above where it has purchased in the past.
And this against a background of talk of late rainfall damaging the quality of Chinese wheat, as some see it doing in the parts of the US too.
At INTL FCStone's Dublin office, Jaime Nolan Miralles said: "Quality is becoming a growing concern as rains hinder [Chinese] harvest activity."
'Heavy rains'
Furthermore, weekly US export sales were solid for wheat too, at 435,000 tonnes of old crop and new (mainly old), near the centre of the range of market expectations, and including 91,000 tonnes sold to China.
And spring wheat did particularly well, easing a modest 0.1% to $7.94 a bushel in Minneapolis for September, as rains returned in force to northern areas to dampen hopes of a late recovery in North Dakota plantings.
Benson Quinn Commodities, based in Minneapolis, said that a "system of storms is moving across North Dakota and north central Minnesota this morning, with heavy rains already being reported.
"We are hearing an area south of Jamestown, North Dakota may have received over 6 inches so far."
Chicago winter wheat for July dropped 0.9% to $7.00 ½ a bushel.
Brazil downgrade
Soybeans did not get much support from US weekly export sales, at a little over 160,000 tonnes old crop and new, well below market expectations.
But the oilseed at least had the support from decent soymeal sales, at 142,000 tonnes, well within forecasts – albeit weighted towards new crop - and a 500,000-tonne cut by Abiove to its forecast for the newly-harvested Brazilian crop to 81.6m tonnes, taking it a little below the USDA estimate, at 82.0m tonnes.
The Buenos Aires grains exchange also pegged the now-finished Argentine harvest at 48.5m tonnes, 2.5m tonnes below the USDA estimate.
While the oilseed never looked like putting in anything but a negative close, the finish down 1.6% at $12.85 a bushel for the November lot, and down 1.7% at $14.97 ½ a bushel for July, its weakest finish of June, was at least less of a decline than suffered by the average commodity.
'Dismal data'
Corn came out poorly from the US export data report too, with sales of 210,000 tonnes old crop and new combined, a figure Richard Feltes at RJ O'Brien termed "dismal".
And Mr Feltes also noted rumours that China "has backed away from considering new crop US corn offers in wake of the 7% rally in December corn this week," at least as of the close of the last session.
However, despite pressure from the change cooler in the weather outlook too, sellers curtailed their urges a little in part because of the relative firmness in wheat, and in part because of the prospect of key US planting and grain stocks reports next week.
Besides Chicago's December lot falling 1.8% to $5.60 ½ a bushel, the July contract dropped 1.3% to $6.73 ¼ a bushel.
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