New week, same agricultural commodity market dynamics.

Investors punished many crops, notably palm oil which plunged nearly 7% at one point, but indulged wheat, which continued to feel a boost from Friday's announcement by Russia's economy minister that the country may yet ban exports.

Not that many analysts believe there will be too much impact, now, on international markets whether Russia does or does not curb, given the volume of the poor 2012 harvest it has already sold, leaving little of the exportable surplus left.

"Irrespective of any official trade ban, our view is that declining local supplies and rising domestic prices means Russia will soon price itself out of the global marketplace anyway," Luke Mathews at Commonwealth Bank of Australia said.

'Window closing quickly'

However, there are concerns that the Russian stance might be contagious, and spread to neighbour Ukraine, which has agreed with merchants informal restrictions on exports.

"There are talks of Ukrainian government reviewing its position on control over wheat exports this season, following Russian economy minister's comments," Lynette Tan at Phillip Futures said.

And the grain also received a continued boost from the dry weather in parts of Australia, where even though there is some rain forecast this week, its potential for refreshing drought-hit crops is fading fast.

"The window to receive beneficial rainfall for much of the Aussie wheat crop is closing quickly," Benson Quinn Commodities said.

Technical fillip

Furthermore, there are some worries over the Argentine crop too, with yield results from the first cuts said to be poor, and with some flood damage sustained to sowings in Buenos Aires province.

And technically, Chicago's December wheat lot had the added advantage of climbing back over its 50-day moving average in the last session, just, sending a positive signal to funds – which anyway have not got such a huge position in the grain potentially to sell as in corn and soybeans.

Speculators had a net long of some 60,000 contracts in Chicago wheat as of last Tuesday, regulatory data last on Friday showed.

The contract added a further 0.8% as of 09:25 UK time (03:25 Chicago time) to reach $9.04 ¼ a bushel.

Weather fillips

However, prices of row crops continued to come under pressure from a US harvest which is progressing rapidly, proving a ramp up in supplies, and so a swing in market power towards buyers, if only potentially temporarily.

It appears likely to have continued its rapid pace over the weekend, with Saturday bringing some light rains to parts of the Midwest, but Sunday generally dry.

And for now, the forecast looks "pretty quiet across the Plains, the Midwest with a large high moving to the East coast", weather service WxRisk.com said, although there could be some storms later in the week.

And the week is expected to bring some more much-needed rains to central Brazil's important soybean belt too, where growers are starting sowings, although the outlook from the weekend is less encouraging, on WxRisk.com forecasts.

"Brazilian farmers had an early start in planting what is expected to be a bumper corn and record soy crop," Ms Tan noted.

"This is widely heralded as a welcoming sign that is expected to help to replace some of the crops lost in the worst drought in a century in US, but only if rains continue in the coming weeks as forecasted."

Fund thinking

Furthermore, corn and especially soybeans were weighed by funds' willingness to sell down large net long positions, which were above 200,000 lots for Chicago contract in both crops as of last Tuesday, even after heavy sell-downs.

"The long fund position in wheat has been manageable, while length in the corn market has had to be liquidated due to a lack of upward momentum," Benson Quinn Commodities said.

Funds were little encouraged to hold by external markets in which concerns over world economic growth returned, sending shares lower in Asia, and fostered a negative start to the week for many commodities such as copper and Brent crude which dropped below $111 a barrel.

The safe haven of the dollar, meanwhile, added 0.2%.

Informa estimates

Also to factor in was a week-long holiday starting later this week in China, a huge buyer of commodities including soybeans, cotton and palm oil.

And Informa data from Friday, estimating US corn production at 11.093bn bushels, above a US Department of Agriculture forecast of 10.727bn bushels to factor in.

The higher estimate was largely based on an assessment of extra sowings than the USDA has factored in, with a bigger yield figure too, of 126.6 bushels per acre compared with the official 122.8 bushels per acre.

For soybeans, Informa pegged the crop at 2.663bn bushels, a little above the USDA figure of 2.634bn bushels.

In Chicago, corn for December recouped early losses to add 0.1% to $7.49 a bushel, but November soybeans dropped 0.7% to $16.11 a bushel, and earlier dropped below $16 a bushel for the first time in a month.

The oilseed weakness looked even worse in Kuala Lumpur where palm oil, undermined by some negative analyst comment and a chart signal flashing red, plunged nearly 7% at one point to 2,577 ringgit a tonne, a two-year low.

The lot recovered some ground to stand at 2,652 ringgit a tonne, a decline of 4.0% on the day.

'Wet weather harvest delays expected'

Soft commodities started mixed, in sugar's case despite news of Syrian tender for 100,000 tonnes of refined sugar, which gave some relief to negative dynamics.

White sugar itself added 0.1% to $561.40 a tonne in London for December delivery, while in New York raw sugar was flat at 19.38 cents a pound.

"Wet weather harvest delays are expected in Brazil's Centre South this week, providing a source of near term price support," Luke Mathews at Commonwealth Bank of Australia noted.

"However, the delays are only expected to be temporary and the rain should provide a boost to late season cane growth."

'Demand remains weak'

Meanwhile, New York cotton shed 0.2% to 73.08 cents a pound.

"Demand remains weak and the US harvest may soon add further headwinds to fibre prices," Mr Mathews said.

"Global inventories are forecast to rise to record levels this year, creating an environment which is more typical of 60-70 cents-a-pound cotton, at best, rather than the recent 70-80 cents-a-pound range."