Eoin Treacy's view Floods in Pakistan, drought in south west China and Western Australia, heat waves in Europe, and rain and cold in the US mid West all add up to a problem for the supply of food commodities. Prices are responding and the major grains and beans have broken out of near two-year bases in a clear signal that demand is outstripping supply.

The well anticipated USDA report on Friday resulted in some violent short-term selling pressure across the sector. However it came from an overbought region following an impressive rally in September.

Corn had posted nine consecutive weeks to the upside when it pulled back last week. However, it found support yesterday in the region of the upper side of the base near the psychological 450¢ area and rallied well today. A sustained move below that level would now be required to question scope for further upside.

Wheat has been the sector leader and had become overbought by any measure when it pulled back in early August. It broke below the 700¢ level last week and while it has firmed somewhat over the last couple of days it needs to get back above 700¢ in a hurry to suggest demand is about to resume a position of dominance.

Soybeans was least overextended but also pulled back sharply last week. It found at least short-term support this week in the region of 1050¢ and would need to sustain a move below that level to question scope for some additional firming.

Oats has held the vast majority of its breakout from the two-year base and has almost completely countermanded last week's downward dynamic. A sustained move below 325¢ would be required to hinder potential for some additional upside.

Rough Rice also pulled back sharply yesterday but closed well off its low and improved upon that performance today. A sustained move below yesterday's low near $11.80 would be required to question scope for some further upside.