It was always going to be difficult for commodities, and other risk assets, to post gains in the flight to safety that followed Cyprus's surprise plans to tax bank deposits.

Euro weakness – amid fears that the Cyprus levy, which is being imposed as part of a bail-out deal, might set a trend when coming to other eurozone support packages – fostered dollar strength which only added to commodities' headwinds.

A firm dollar makes dollar-denominated exports, such as many raw materials, less affordable to buyers in other currencies.

The CRB commodities index lost 0.7%.

"The strength in the U.S. Dollar as the Euro weakens has produced a 'risk off' attitude today in futures in general," Jerry Stowell at Country Futures said.

"It's an ugly day in all of the ags."

'No longer fears short-covering'

But many agricultural commodities did especially badly, with investors viewing the extensive coverage of short positions in the week to last Tuesday, as unveiled in latest data from the Commodity Futures Trading Commission, as creating scope to put on fresh ones.

Raw sugar, for instance, in which speculators cut their net short position by 75% in a historically large bullish swing, tumbled 3.2% to 18.29 cents a pound as bets on lower prices came back into vogue.

The drop in prices "shows that the market no longer fears the impact of a short-covering rally by the speculative community", Nick Penney at Sucden Financial said.

London white sugar, whose strength has been a support to raw sugar, faded, closing down 2.2% at $527.40 a tonne for May, while ideas of strong production this year came back home to roost.

"The overall statistically bearish tone will remain until either a weather event in a major growing area or a major end user stepping up causes near-term thinking to change," Mr Penney said, forecast that raw sugar futures will go "back down to 18 cents in the short/medium term".

'Farmers betting against themselves'

Fresh weakness in the Brazilian real, which has lost some 3 centavos against the dollar since hitting a 10-month low a week ago, has also done New York raw futures few favours, given that Brazil is the top producer of the sweetener.

Ditto for arabica coffee, which closed down 2.3% at 134.35 cents a pound in New York for May 2013 delivery, the lowest finish for a nearest-but-one contract since May 2010.

Besides the prospect of a strong harvest this year, the bean is also being pressed by a shortfall in selling of the last crop, compared with typical rates.

"One of the issues has been that Brazilian growers boxed themselves in a corner by holding back on sales and the danger was in anticipating prices to rally up, which never happened," Judith Ganes-Chase, the veteran soft commodities analyst, said.

"Brazilian farmers were betting against themselves."

Wheat drops

Against that backdrop, the declines in grains looked relatively modest, although Chicago soft red winter wheat, a firm favourite among speculators seeking short exposure, comfortably underperformed the average commodity.

The benchmark May contract fell 1.4% to $7.12 ¾ a bushel for May delivery, and lost more than 2% at one stage.

Signally, Kansas hard red winter wheat, in which hedge funds have less interest (despite it comprising a bigger proportion of the US harvest than soft red winter) lost a more modest 1.0% to $7.44 ¼ a bushel.

And there were some reasons to feel bullish on the crop, with Algeria, Jordan and Tunisia putting out tenders, extending ideas of firm demand from importers.

US exports, as measured by cargo inspections, for last week were reasonable, at 23.9m bushels , down from 28.7m bushels  the week before, but higher than the 21.2m bushels  in the same quarter last year.

(Paris wheat, of course, had a weakening euro to support it, helping the May lot close unchanged at E234.75 a tonne. London wheat for May, affected by a pound which gained against the euro but declined against the dollar ended 0.7% lower at £196.60 a tonne.)

'Improving moisture base'

Still, it looks like drought-pressed US winter wheat seedlings are set for more rain, with weather service MDA noting that this week "showers across the Midwest and central Plains will further improve soil moisture, which will benefit wheat and spring crops in a few weeks".

The southern Plains are set for rain next week.

And there is an upswell of hope for crops elsewhere too, with  Richard Feltes, at broker RJ O'Brien, noting that an "improving moisture base across former Soviet Union reinforces ideas of a sizeable rebound in 2013 grain production".

Commerzbank took an upbeat view of Coceral data on Friday which showed a sharp recovery in crops in southern and eastern Europe which were hurt by drought last year.

"Double-digit growth figures are anticipated in some cases, particularly in Romania, but also in Bulgaria and Spain," the bank noted.

Corn bucks the trend

In fact, Chicago wheat's performance was bad enough to lose it once more its premium over corn, which closed up 0.4% at $7.20 a bushel, a momentous gain on a day like this.

Corn was underpinned by OK export inspections, by current if not historic standards, of 15.4m bushels, up nearly 900,000 bushels week on week.

But the grain is also being helped by ideas that farms are receiving too much of a good thing – ie rain.

The precipitation helping winter wheat seedlings is, in some areas of the US, hindering farmers trying to get crops in the ground.

'Very slow planting'

"Showers increased across the south western Midwest and far north eastern Delta this past weekend, which slowed fieldwork and increased wetness once again," MDA said.

"Showers should continue there early and late this week, which will keep spring crop planting very slow."

At Martell Crop Projections, Gail Martell said: "March has been unseasonably cold in the Midwest, 4-7 degrees Fahrenheit below normal, and averaging 31 Fahrenheit. This is increasing worries about corn planting delays."

At broker Allendale, Paul Georgy said: "Traders are watching the weather forecast for the Midwest which currently has another system moving through later this week.

"Planting delays are already being talked about."

And, on the demand side, hopes of improved orders from the biofuel industry gained momentum as Valero revealed it was restarting a plant in Ohio, with an Indiana factory, the last one left mothballed by last year's high corn prices, also due to reopen soon.

Exports tumble

Soybeans, however, extended their losing streak to five successive sessions, amid growing fears that Brazil's logistical hiccups (which represent a key problem for Brazil's new agriculture minister) may no longer be driving trade America's way.

Ships are, after all, being filled, even if after delays, and Argentina is now believed to be taking many overspill orders.

Indeed, there are now fears of cancellations of orders of US supplies.

US weekly cargo inspection data were of little comfort, coming in at 8.9m bushels – halving week on week.

 'Systemic logistical problems'

Soybean's price fall, down 1.2% to $14.09 ½ a bushel for the May contract, "suggests growing scepticism over whether all existing US export sales will be executed", RJ O Brien's Mr Feltes said.

"Some traders fear that China will switch US soy sales to South America in June-August."

Certainly, Brazilian prices are offering buyers cause to stick with the country, turning negative at the port of Paranagua for the first time since 2008.

"The drop in price is believed to be a direct result of the systemic logistical problems in Brazil," Michael Cordonnier at Soybean and Corn Advisor said.

"The negative premium is expected to increase in coming weeks as more soybeans arrive at the ports and shipping delays mount."

Meanwhile, US sowing delays are not such a support for soybeas, which are later planted.

Indeed, poor corn seeding conditions could prompt farmers to grow extra soybeans instead.