Soft commodities found gains on Tuesday, in defiance of a weaker market mood after Spain's prime minister, Mariano Rajoy, disappointed investors by saying the country was not imminently to seek aid with its debt issues.

In New York, raw sugar added 2.2% to 21.59 cents a pound, although largely on technical factors, as rising prices fed on themselves to push holders of short positions out of the market.

"The chat around the market seems to be generally bearish but the prospect of further fund covering can't be ruled out," Sucden said.

'Added fuel to the fire'

Also in New York, arabica coffee added 3.1% to 183.65 cents a pound, the highest finish for a spot contract since July, helped by a round of short covering encouraged by forecasts of dry weather in Brazilian coffee districts.

This would represent a less-than-ideal follow on from a good round of flowering on coffee trees,

Parts of Espírito Santo, for instance, are reported to have produced their best flowers for four years, and some weeks ahead of normal, helped by the combination of dryness, followed by early September rains.

"Further talk of Brazilian government loans" to help coffee farmers, so reducing the pressure to sell beans "only added fuel to the fire", Sucden Financial said.

'Larger soybean production number'

However, in Chicago, grains and oilseeds continued their decline, underperforming a static commodities market overall, as measured by the CRB index.

The decline in soybeans attracted the most trade attention, dragging the November lot to a three-month low for a spot contract of $15.26 ½ a bushel at one stage, pressed not just by a rapid harvest, which has bumped up supplies for now, but growing ideas of a better-than-thought one too.

Darrell Holaday at Country Futures said: "The pre-report production estimates continue to indicate that the industry will be expecting a larger soybean production number from US Department of Agriculture next week," in its monthly Wasde crop report.

"We question that, but that is what the market is trading."

'Market desperately needs demand'

US Commodities said that "soybean yields across the Corn Belt are larger to, in some cases, much larger than expected.

"The market has now dialled in a yield jump of 2-2.5 bushels per acre," compared with the current USDA yield estimate of 35.3 bushels per acre.

Nor is there so much talk of demand around, with China, the top soybean importer, on holiday.

Richard Feltes at RJ O'Brien said: "The soybean market desperately needs demand which is unlikely near term with world's largest soy buyer on holiday while other end users await a chart bounce."

'Very weak palm oil market'

In fact, Asia provided an ultra-negative influence on the complex with crude palm oil prices slumping 8.5% to 2,255 ringgit a tonne in Kuala Lumpur, the lowest close since November 2009, amid signs of weak Malaysian palm exports at a time when output is around a seasonal high.

"Palm oil continues to pull the rug out from under the vegetable oil complex," FCStone said.

"We have a very weak palm oil market that will steal demand from the other more expensive vegoils."

Chicago soyoil itself for December entered late deals down 1.0% at 50.70 cents a pound, while soybeans were 1.8% lower at 15.31 ¾ a bushel.

Rain refreshment

That was enough even to eclipse Chicago wheat, which stood down 1.6% at $8.69 ¾ a bushel, sapped by rains boosting hopes for US winter wheat sowings, which had looked set to be troubled by drought.

Not that US dryness worries are over.

"Kansas received only 0.60 inches of rainfall last week, not improving field moisture enough," Gail Martell at Martell Crop Projections said.

"Growers in the top US wheat state rated topsoil moisture at 68% short-very short, 32% adequate and 0% surplus.

"Summer drought was so severe that soil profiles have become dry through a deep layer.  It would take 4.5 inches of rainfall to fully replenish parched fields."

'Moved up too high'

However, there were continued worries about whether the grain was too expensive compared with corn.

"The pressure in wheat the last two days is somewhat tied to the idea that wheat moved up too high and locked it out of feed rations and pushed more corn into the feed ration," Darrell Holaday at Country Futures said.

US wheat has also yet to prove itself on export markets so far in 2012-13, in competing to replace drought-reduced Black Sea supplies.

And, indeed Mr Feltes noted "continued wheat offers out of Black Sea", evident in preliminary results of an Iraq tender showing competitive Romanian and Ukraine offers, and in" low-ball Australian wheat offers".

'Potential to offer support'

Corn was the strongest of Chicago's big three gains, holding, just, on to positive territory in closing deals, with a gain of 0.1% leaving the December lot at $7.57 ¾ a bushel, helped in part by a continued reaction to Friday's weak US inventory number, which caught many investors off-guard.

They have been continuing to unwind short corn, long wheat or soybean spreads, partly explaining the weakness in those markets too.

Furthermore, the record US harvest pace "has the potential to offer support as harvest get completed as corn gets more difficult to buy", and harvest pressure weakens, Benson Quinn Commodities said.

The broker added: "Some in the trade still expect the corn crop to get smaller on future USDA reports, despite better than expected yields in many areas of the northern Plains"