So just how good, after all, was China's trade data last weekend

OK, that Google effect hung around to nibble at markets on Friday too.

Google's results on Thursday surprised the market not only for coming in short of earnings forecasts, but being accidentally published appearing clumsy for a company seen as master of all things technological.

The data also extended a bit of a theme of technology sector disappointment, following poorly-received results from the likes of IBM, Intel and Microsoft, and put a little negative pressure on shares, which closed down 0.8% in Tokyo and shed 0.5% in Singapore.

But commodities faced extra pressure too from ideas that well-received Chinese trade data earlier this month may not have been quite so upbeat after all.

'Not yet a trend'

The data showed exports rising, at 9.9%, twice the rate forecast and well ahead of a 2.4% increase in imports, and appearing to show happy days for a country which is a huge buyer of raw materials, including cotton, rubber and soybeans.

However, a spokesman at China's commerce ministry, Mofcom, urged investors not to get carried away.

"We are happy to see that the September trade data has shown some positive changes," ministry spokesman Shen Danyang said.

"But with only a single month's figure, it is still not enough to judge a trend of recovery due to the complicated external economic environment."

Rubber drops

Rubber in particular felt investor disappointment, tumbling 3.8% to 255.4 yen a kilogramme in Tokyo.

 And this despite crude rubber stocks at Japanese ports falling to a two-year low of 5,706 tonnes, as of October 10, data from the Rubber Trade Association showed.

The comments in China touched a raw nerve after reports earlier in the week that Toyota Motor Corp is to idle production lines at its plant in Tianjin, in northern China, because of poor demand for its cars.

That said, a large chunk of that is being put down to ill-feeling towards all things Japanese in China because of a territorial dispute.

Pressure on

And, in New York, cotton, of which China is the top importer, fell too, defying its strong finish of the last session to stand 1.2% down at 76.83 cents a pound for December delivery, as of 09:30 UK time (04:30 New York time, 03:30 Chicago time).

In fact, Commonwealth Bank of Australia downgraded its forecast for prices, "because of subdued demand and record high global cotton inventories", seeing them dropping to 65.80 cents a pound in the third quarter of next year, whatever the fears for US quality which have sent futures soaring over the last week.

And, among other major Chinese agricultural commodity imports, palm oil struggled too, up 0.1% at 2,498 ringgit a tonne in Kuala Lumpur, and well off an intraday high of 2,524 ringgit a tonne fostered by improved Malaysian export hopes.

"Exports are expected to stay up for the rest of the year as exporters with overseas refineries rush to export palm cargoes before duty-free crude palm oil export quota is discontinued at year-end," Ker Chung Yang at Phillip Futures in Singapore said.

'Liquidation complete'

In Chicago, soybeans, of which China is the top importer, fared worst as well, although losses were limited to 0.4%, taking the November contract to \$15.39 ¼ a bushel – still, after all, well over \$2 a bushel below last month's record high.

One thing in the oilseed's favour is that fund selling, whether it had been accelerated or not by US regulatory changes, appears to be slowing down as harvest winds up, and with it seasonal pressure on values.

"Early week liquidation by funds that was tied to Dood-Frank rule on new speculative position limits appears complete," Benson Quinn Commodities said.

In fact, funds bought an estimated 11,000 Chicago soybean lots in the last session, along with 12,000 corn contracts and 2,000 in wheat.

'In need of rain soon'

Furthermore, South American weather is not proving fantastic, as Agrimoney.com pointed out on Thursday, albeit more with reference to corn.

"The trade has needed something to be a driver or to get a focus on. Brazil weather seems to fit that bill for now," Mike Mawdsley at Market 1 said.

"And now there are many parts of Brazil in need of rain soon."

Furthermore, US exports of soybeans have been generally solid (bar weekly data released on Thursday), with talk of China remaining keen to buy.

And sales to "non-China destinations have been behind normal pace at this point in season, with some inferring non-China sales could pick-up", Benson Quinn said.

'Spread is narrowing'

For corn, export demand has been quicker to erode in the face of high prices, although there is hope of that returning now rival Argentine and Brazilian inventories are running down, and prices closing their discount to Gulf of Mexico offers.

"While South American offers remain at a discount to the US, the spread is narrowing and offers for December and beyond are becoming harder to find," Benson Quinn said.

"This narrowing could weigh on the southern US livestock producers ability to import corn and would also allow US exports to Mexico to remain constant."

More on US livestock demand will be known on Friday, when the US unveils cattle on feed data, with the poultry sector actually showing remarkable resilience despite high corn prices, with eggs set for hatching into broiler chickens up "slightly" in the latest week, according to the US Department of Agriculture.

December corn fell 0.3% to \$7.58 ¾ a bushel.

'Ongoing crop concerns'

Wheat resumed its place as the most resilient performer of Chicago's big three, helped by ideas of improved export demand coming America's way, with the Black Sea out of exportable supplies, Europe's waning and Argentine and Australia looking set for disappointing harvests.

"Ongoing crop concerns in many parts of the world" have been supporting sentiment, Luke Mathews at Commonwealth Bank of Australia said.

"US winter wheat crops in the northern plains are likely to be poorly established leading into dormancy because of low soil moisture reserves and delayed seedling emergence.

"And ongoing dryness in Western Australia is causing further cuts to yield prospects."

Meanwhile, in Europe, UK sowings have got off to a poor start too.

Wheat for December edged 0.25 cents higher to \$8.68 ½ a bushel.