The outlook for agriculture markets has deteriorated, Credit Suisse said Tuesday, as harvests have come in better than expected and long-term technical trends have turned negative in many markets.

Analysts at the Swiss bank warned they had a negative outlook for most prices as agricultural markets do not yet provide good value, while the environment looks set to remain challenging given sluggish growth, persistent funding stress, and deleveraging pressure.

For grains, Credit Suisse said corn's strong over valuation and neutral technicals continue to point to lower prices, despite positive short-term fundamentals in a tight market.

The bank's analysts said corn prices need to fall below $5.00 a bushel to trade at fair levels, but revealed a $5.70/bushel 3-month forecast and $5.40/bushel 12-month forecast, due to positive cyclical support.

Credit Suisse said its wheat outlook is now negative due to bearish technicals, neutral fundamentals and an undemanding valuation.

The bank's analysts said momentum is weak with wheat prices having failed to reach new highs since February, and the long-term trend now downward sloping.

For softs, Credit Suisse said there are still substantial downside risks in the coffee market, as it's probably one of the most cyclical of all agricultural commodities.

With economic growth in Europe slowing and coffee being significantly over priced, the bank's analysts said value is the dominating factor, making their 12-month outlook negative.

Credit Suisse said the focus is on cocoa's technical analysis because of neutral valuation and fundamentals, but the trend has broken to the downside and momentum is deeply negative.

This leaves the bank with a negative outlook for cocoa, with very few signs of consolidation before the technical situation can start to improve again.

However, Credit Suisse said that sugar should be more stable than other agricultural markets given its neutral trend and valuation.

Despite the global sugar market heading towards a large surplus this year, capping upside from current levels, the bank said that such an over-supply is needed as inventories are at multi-year lows.

Credit Suisse said that prices are likely to remain within the 21 to 25 cents/lb price range.

-By Michael Haddon, Dow Jones Newswires; 4420-7842-9289; michael.haddon@dowjones.com