The prospects for wet in the US weather outlook declined a notch on Thursday it, and with it the pressure on corn futures.
The run of the European weather model late last night "is not as wet as a last few runs with regard to potential for saying significant rain over the eastern Corn Belt during the period of June 19-21", weather service WxRisk.com said.
"It still has fairly good rain just not the widespread two and three inch rains the model data was showing earlier.
"If the next few runs of the European model continue to run drier then perhaps we may have a trend," WxRisk added.
'The big question'
Sure, a number of meteorologists have been calling the formation of El Nino conditions, linked to warmer Pacific temperatures and liberal rains in the US, so helpful to corn yields.
"The big question is when will the better probability of rainfall actually hit the Midwest this summer," Jerry Gidel, feed grains analyst at broker Rice Dairy, said.
"If it's 30 days or more for this warming in sea surface temperatures to improve moisture in the frontal passages across the central US, I wouldn't be projecting any higher than a 158 bushels-an-acre national corn yield.
"A level that will get us by, but we won't have super excessive supplies at our disposal either."
The US Department of Agriculture foresees a yield of 166 bushels an acre in its estimates.
'Area to watch'
Whatever, that slight easing in the moisture outlook tempted profit-taking among investors for whom short bets on December corn have proved a winning bet, with prices dropping more than 6% in the first three days of the week.
The contract added 0.9% to $5.15 a bushel on Thursday, as of 03:00 Chicago time, (09:00 UK time).
And this just when bears appeared to have the contract at their mercy.
"It seems the December corn contract is going to test the recent low of $5.07 ½ a bushel from last week, and very possibly the May 2011 low of $4.99 a bushel," Brian Henry at Benson Quinn Commodities said.
"I believe the stage is set for Dec corn to trade well below the $4.99-a-bushel price level, but I would be cautious selling new crop corn near those levels at this point in the growing season."
At Allendale, Paul Georgy warned that "the technical support area to watch in December corn futures is the $5.00-a-bushel level. A close below that level could signal more selling."
Export performance
Still, as an extra support, South Korea's Korea Corn Processing Industry Association said it was seeking 55,000 tonnes of corn to arrive by November, offering US corn a chance to prove that it export performance, while disappointing, has not turned dismal.
A further indicator on that will be gained later, with weekly US export sales data expected to show a figure at least in line with the previous week's 400,000 tonnes, and potentially hitting 600,000 tonnes.
And with further talk on the firm US cash market, albeit with speculation too of farmer selling cutting in over $6.00 a bushel, Chicago's old crop July corn contract gained too, by 0.8% to $5.97 ¼ a bushel.
'Hard to rally'
That was enough to reduce further its discount to the July wheat contract, which dropped earlier to $0.20 a bushel, matching Wednesday's low, and down from levels above $1 reached in May.
Not that July wheat performed badly, adding 0.5% to $6.19 a bushel, indeed keeping up with Kansas hard red winter wheat, which gained 0.6% to $6.44 a bushel.
"But we are still in the harvest timeframe. It is hard to rally in June," Mike Mawdsley at broker Market 1 said, noting the pressure that supplies from the ongoing winter wheat harvest bring to prices.
"The seasonal time to find a low in wheat is near July 1," he said.
'Likely direction is up'
Luke Mathews at Commonwealth Bank of Australia struck a note for bears, saying the "excitement" at Wednesday's downgrade by Abares to forecasts for the Australian wheat crop was "misplaced".
"After all, a local crop above 24m tonnes is still large," he said.
Still, Mr Mawdsley tapped into a growing idea that Chicago prices may be forming a bottom, saying that "dry conditions in parts of Russia/Ukraine could help put a low in the wheat market soon".
Technically, Lynette Tan at Phillip Futures said that "the one-hour wheat chart suggests the likely direction is up after a lethargic downward countertrend".
'Nothing is immune to selling'
Soybeans were again the laggard, falling 0.3% to $13.16 ½ a bushel for November delivery, and the same to $14.04 a bushel for July.
The oilseed, while boasting the tightest supplies, and therefore in theory the firmest prices, is seen as more vulnerable than Chicago grains to the broader market liquidation, given that speculators retain a near-record net long in soybean futures and options.
And external markets were in a generally negative mood, ahead of Greek elections likely to determine the country's future in the eurozone.
Shares closed lower in Tokyo, SIngapore and Shanghai, while the safe haven of the dollar ticked 0.1% higher.
"Soybeans have the best fundamentals, but nothing is immune to selling pressure when funds hit the sell button," Mr Mawdsley said.
China influence
As an extra pressure on soybeans, prices on the Dalian exchange in China tumbled too, by 1.4% to 4,340 yuan a tonne for the best-traded January contract.
China is the top importer of the oilseed, and its prices are especially under view given weak crushing margins, which in theory could spill over into softer demand.
However, on the Zhengzhou exchange, cotton for January added 1.0% to 19,065 yuan a tonne.
China is the top importer of the fibre too, besides the biggest producer and consumer, and that helped New York's December contract edge 0.1% higher to 70.49 cents a pound.
For once, the spreading between the December lot and July contract, which has driven them in opposing directions in recent sessions, was not so extreme. The July lot gained too, by 0.3% to 75.30 cents a pound.
Palm tumbles
Further afield, palm oil had a dismal day in Kuala Lumpur, tumbling 2.5% to 2,874 ringgit a tonne for August delivery, the lowest for a benchmark contract since October last year.
The vegetable oil is particularly sensitive to eurozone jitters, Europe being a major importer with such concerns more than enough to offset data from India showing a jump of 70% in imports of refined palm oil last month, compared with April.
Eurozone sensitivities are being heightened ahead of a key auction of Italian sovereign bonds later on Thursday.