Could corn futures maintain their revival of the last session?

One bar to progress among risk assets in general was a batch of Chinese economic which showed the world's second largest economy not quite in as fine condition as many investors had thought.

China's industrial output rose 9.9 per cent in the first two months of 2013, making it the weakest start to a year since 2009 on that score, weekend data revealed.

Retail sales data too disappointed, if at double digit rates which would wow a Western country, and new remninbi loans fell by 620m remninbi last month.

"Lower-than-anticipated new lending and overall social financing indicate more deceleration later in the year," Crédit Agricole said, adding that, with inflation pressures bubbling under, "the need to curb prices may well lead to monetary tightening and additional downward pressure on growth".

'Supportive – however…'

Shares opened slightly lower in European markets, having lost 0.4% in Shanghai itself, while managing a flat performance in Hong Kong.

At least, from commodities' perspective, the dollar was a touch weaker, improving the affordability a little bit of dollar-denominated assets to buyers in other currencies.

That helped a resilient opening among agricultural commodities, although less so from cotton, of which China is the top importer.

Cotton turned out well from the US Department of Agriculture's Wasde report on Friday which lowered, by 300,000 bales to 4.2m bales, the estimate for domestic stocks of the fibre at the close of 2012-13, lifting indeed the estimate for Chinese imports, to 15.0m bales.

However, the trouble is that New York futures are already elevated.

"The report was supportive for cotton prices - but perhaps not from current levels," Luke Mathews at Commonwealth Bank of Australia said.

May cotton, which on Friday touched a 10-month high, traded in and out of positive territory in early deals, standing 0.6% lower at 86.36 cents a pound at 09:30 UK time (05:30 New York time, 04:30 Chicago time – US clocks went forward over the weekend).

Corn vs wheat

Corn, meanwhile, managed to hang on to upward momentum stemming from the Wasde report, in which the USDA wrong-footed many investors by keeping at 632m bushels its estimate for stocks at the close of 2012-13.

Analysts had expected an upgrade to the stocks figure, on ideas that wheat, at an atypical discount to corn, was displacing its fellow grain in feed rations.

"For all the talk of wheat displacing corn in feed rations, that was not shown in the report," Benson Quinn Commodities said.

"Corn for feed was increased 100m bushels, while wheat feeding was left unchanged."

'Critically-tight inventories'

CBA's Luke Mathews said: "The upgrade to local demand offset downgraded export projections, leaving ending stocks unchanged at a critically-low 5.6% of disposal.

"Critically-tight old crop inventories means feed markets will remain very sensitive to standard weather scares in 2013."

At US broker Market 1, Mike Mawdsley said: "Numbers are still tighter than desired with spring/summer weather the wild card - hang on for the ride."

Indeed, signally, it was not just old crop corn which rose on Monday.

Sure, Chicago's best-traded May contract added 0.6% to $7.07 ¾ a bushel, but the new crop December lot kept up, gaining 0.6% to $5.50 a bushel.

'Less bearish than anticipated'

Morgan Stanley added to the more upbeat mood on corn, which for December delivery set an eight-month low in the run up to the Wasde, and for the May contract came close to repeating the feat.

The Wasde was "less bearish than we anticipated", the bank said.

"With this hurdle cleared, we expect higher old-crop corn prices in the weeks ahead as the market positions ahead of the March 28 Grain Stocks report," the next key grains briefing from the USDA.

And there is plenty of scope for speculators to increase their long coverage on the grain.

While managed money's net long positions rose more than 10,000 contracts in the week to last Tuesday, they remained, at 62,864 lots, historically weak, and well below a level of 279,000 lots reached in December.

'Global usage remains good'

In wheat, speculators have a historically high net short position in Chicago, and in Kansas, home of hard red winter wheat trading, turned net short for the first time since May.

… which, in questioning the appetite for further short positions, offered some protection against a Wasde report deemed bearish for the grain, in cutting the US export estimate without any offsetting rise in domestic feed use, and increasing the forecast for world stocks too.

"Global wheat ending stocks have been raised to reflect forecast larger crops, particularly in India," Mr Mathews said.

"The world wheat stock to use ratio is forecast at 26.5% in 2012-13, and early reports suggest this will increase further in the upcoming 2013-14 season."

'Global usage remains good'

Still, there is still plenty of commercial demand around for wheat, even if not all of it is being sourced from the US.

"In spite of an extended period of elevated prices in the wheat, global usage remains good," Benson Quinn Commodities said.

Oman on Monday bought 20,000 tonnes of wheat from Canada.

Furthermore, wheat gained support from corn, with investors not comfortable about increasing the gap too far.

Chicago's May contract added 0.2% to $6.98 ½ a bushel, although the Kansas May lot eased 0.1% to $7.33 ½ a bushel following more rain at the weekend for the US Plains, boosting prospects for winter wheat seedlings.

"Weekend precipitation was near expectations," weather service MDA said, adding that "increased snow cover will help protect western and northern crop areas from colder temperatures this week".

'Slightly bearish'

Soybeans, meanwhile, continued the upward move which saw the best-traded May contract stage a late recovery to the last session.

While they ended on Friday a touch lower, after the USDA failed to cut its estimate for domestic inventories, the finish was well above intraday lows.

Indeed, technically, that close was not such a disaster, with the lot finishing nonetheless higher on the week, for the fourth successive week, and dampening the impact of a disappointing Wasde for soybean bulls.

"The USDA's WASDE report was slightly bearish for oilseeds because the USDA stated that US soybean exports and crushing will slow down markedly over the coming months because of strong South American competition," Mr Mathews said.

Chicago's May contract gained 0.4% to $14.76 ¾ a bushel.

Stocks dwindle

Elsewhere in the oilseeds complex, palm oil gained 0.5% in Kuala Lumpur to 2,460 ringgit a tonne, extending its March recovery.

Gains on Monday were helped by official data showing Malaysia's exports falling, by nearly 14%, but production dropping even more, by 19.5%, to leave stocks down 5.2% on the month,.

Furthermore, exports this month have not been so bad so far, up 2.2% from those in the first 10 days of February, according to cargo surveyor SGS.