With supply side estimates stabilizing and in some markets building, market focus has shifted to demand destruction. In addition, improved weather in South America for planting, against the backdrop of the US harvest, as well as concerns over global growth, are providing further pressure on prices.

While sentiment has turned more negative as the quarter comes to a close, we go back to fundamentals. Supply and demand balances are tight, particularly in the soybean complex. Though demand destruction is anticipated, we see minimal evidence of it happening, with the exception of corn exports.

Indeed, we are concerned that the recent fall in grain and oilseed prices amid expectations of sizeable South American crops and large North American plantings next crop year, may prevent the necessary herd reduction in the livestock sector. This might particularly be the case in the better capitalized hog sector.

Even with assumed demand rationalization, we find soybean meal stocks to be extremely tight. Should the livestock sector continue production at current levels, availability in the US, which has the biggest influence on CBOT values, will be scarce.

Eoin Treacy's view The grain and bean complex pulled back sharply in September before finding at least short-term support over the last week. If potential for a further unwind of the summer's significant gains is to be avoided corn, soybeans and wheat will need to hold above their recent lows.