It was hardly a busy day on agricultural commodity markets, with pits closed in the US for President's Day holiday.

But what trade there was was broadly positive, especially in London white sugar futures, which rose 1.6% to $497.90 a tonne, boosted by ideas that its New York-listed peer, raw sugar, may make a strong, technically-inspired return from holiday.

Data from the US Commodity Futures Trading Commission, the US regulator, late on Friday showed speculators hiking their net short position in raw sugar to more than 25,000 contracts, a bearish positioning beaten only once since 2006, when data start,

And that was in September 2007, when it preceded a massive short covering wave, and a shift to a net long position of more than 63,000 contracts by the end of October 2007.

'Thrown in the towel'

There are ideas that the same may happen this time.

Nick Penney, at Sucden Financial, said that while the sugar market "seems to have thrown in the towel", as evident in the positioning, and a reflection of ideas of ample supplies of the sweetener, the increase in the net short position "should sound a note of caution" to bears.

Luke Mathews, at Commonwealth Bank of Australia, went one further, saying that "a short-covering bounce remains on the cards given the massive short position accumulated by speculative investors".

In cocoa, speculators retain a net long position, if a decreasing one amid fears, as highlighted by Rabobank, that selling by West African producing countries is to weigh on prices for the short-term.

London May cocoa closed down 0.6% at £1,409 a tonne, only £1 above an intraday low which represented the lowest level since April last year, and despite a weak pound (of which more below).

Buyers step in

As for grains, what news there was proved sufficient to help positive closes, with Paris contracts continuing to gain support from ideas that French supplies won the lion's shares, if not all, of an Algerian purchase last week of some 400,000-500,000 tonnes of wheat.

And this after latest weekly European Union wheat export figures came in at firm 420,000 tonnes.

Indeed, "markets have stabilised as consumers aware of tight global supplies and new crops yet to be made did not want to miss the opportunity to step in and buy", traders at a major European commodities house said.

"The weakness of the euro has helped support EU export competitiveness"

Sterling slides

Paris wheat for March closed up 0.6% at E245.75 a tonne.

And London wheat for March matched it, in adding 0.6% to £205.50 a tonne, although it might have been expected to have done better, considering a fall in sterling, which fell to a seven-month low against the dollar, and approached a 15-month bottom against the euro.

The declines came against concerns over the UK economy, which were stimulated when Bank of England policymaker Martin Weale said the pound may need to weaken further to protect growth.

London shares closed down 0.2%, contrasting with a 0.5% gain in Frankfurt stocks and the 2.1% jump in Tokyo shares, which are reacting better to a weaker currency, the yen.

'Forward trade commitments difficult'

Furthermore, fundamentals are behind London wheat too, with a low rate of sowings, thanks to poor weather, raising fears that this year's UK crop may prove significantly lower than last year's.

Strategie Grains is forecasting a 12.4m-tonne UK crop, "with many in the trade working on a smaller number still", the commodities house said.

Furthermore, "what is planted is in variable condition making forward trade commitments difficult".

Selling pressure from hedging by farmers, bitten from 20-year low yields in 2012, is certainly weak, as they remain cautious over selling in advance crop they have not managed to get into the ground.

'Somewhat below expectations'

Some investors may be disappointed by the performance of Paris rapeseed too, which closed up only 0.1% at E467.50 a tonne for March, despite ideas that rains in Argentina over the weekend meant to refresh crops of rival soybeans were a little underwhelming.

"One could make the argument that the rains over central, eastern and northern Argentina were somewhat below expectations," weather service WxRisk.com said.

"There were some areas which did get a a significant amount of rain, but it was not the uniform widespread coverage that the models were forecasting."

That said, the rain event isn't over yet, with the latest forecast for a "band of heavy clouds now over the northern third of Argentina to drop more significant rain over the north east and far north west portions of Argentina today into Tuesday".