Soybeans stood out in what was a broadly weak day for commodity markets as housing data from the US unexpectedly weakened.

The NAHB Housing Market Index reading for February weakened to 46 from 47 in January, the index had been expected to show a moderate improvement.

Copper finished down 0.8% on the LME, while gold declined 0.6%.

That said equities enjoyed a positive day, bolstered by merger rumours and steady sentiment as US markets returned following yesterday's holiday while Asian markets got back to speed following last week's lunar new year celebrations.

On share markets, the Dow Jones Industrial Average finished up around 0.4%; in Europe the FTSE 100 posted a 1% gain and the German DAX 1.6 %

The dollar closed relatively weak, down 0.3% against the euro and 0.6% versus the Japanese yen.

Soybeans surge

The continued gains in soybeans today relate to ongoing issues with Argentina as limited rainfall over the weekend did little to reduce drought-related crop shortages from the world's third-largest soybean exporter.

The most active soybean contract in Chicago, for May delivery, finished Tuesday with a strong 3.0%, settling at \$14.57 ¼ a bushel.

"Though recent rains were highly beneficial, much moisture is needed to significantly improve corn and soybean conditions," indicated Gail Martell, Meteorologist with the Martell Crop Projections Team.

While reports suggest the growers benefited from "heavy rainfall over most of the grain belt last week," Martell cautioned that drought has continued to "stress" crops in the western Buenos Aires area, a key corn and soybean area, after they, "missed out on heavy rainfall last week.

US soybean futures have also been bolstered by media reports that Argentinean producers are withholding supplies amid speculation of further depreciation in the Argentine peso, which would result in higher revenues for exporters.

The latest release from the Argentine ministry of agriculture reflects the reluctance amongst exporters, reporting some sale under the current harvest are down 35% on the same time last year.

Soymeal has also seen a positive day, rising on the coat-tails of soybeans and comments from a feedmill association in Indonesia, suggesting imports by the country would grow by 5% per year for the next five years on the back of rapid expansion of the countries aquaculture industry.

Soymeal for March delivery closed with a solid 3.9% gain, to \$425.30 a short ton.

Corn, wheat slips as wet weather returns

In contrast to the drought related gains in the soy complex, corn and wheat prices traded lower amid reports wet weather across the plains.

"A mixture of rain, sleet and snow is expected in Kansas and Oklahoma," reported the Martell Crop Projections Team.

Between 0.5-1 inch of rain is expected to fall over most of the hard red winter wheat region late this week with a similar system bringing further rain and snow next week, according to reports.

At present reports suggest the three major wheat states are currently reporting near-normal winter moisture. However, the Martell group cautioned that drought concerns are not-over, warning that subsoil moisture levels remain very low following the drought conditions witness across last summer and autumn.

"Going back to mid-July, however, the Oklahoma wheat moisture deficit is 5 inches."

May corn futures were down 0.7% by the close at \$6.92 a bushel.

Wheat futures for the same delivery month were down 1.3% in Chicago, at \$7.38 ¾ a bushel.

Cocoa falls as short bets increase

The weaker tone across much of the commodity complex did little to help the price of soft's as cocoa futures slipped to an eight-month low of \$2,117 a tonne in New York. Similar weakness was witness in London futures, which also touched a multi-month low.

The weakness was in part attributed to Fridays Commitment of Traders report, "showing the increase in the speculative short position to over 90,000 lots as of last Tuesday," indicated Nick Penney, analyst at Sucden Financial.

Additional pressure came as Cameroon, the world's fifth-largest cocoa grower, reported a 14.9% year-on-year increase in shipments in the five months ending January, according to the National Coffee and Cocoa Board.

Cocoa exports totalling 172,135 tonnes compared with 149,793 tonnes in the same five month period ending January 2012.

Cocoa futures for May delivery closed at \$2,119 tonne in New York, down 1.2% on the day.

Spreads activity

Coffee edged lower in line with the general soft tone, although trade was largely focused on positioning ahead of tomorrow's notice period.

As a result plenty of activity seen in the March/May spread, which weakened initially before turning higher and trading "all the way back in to the 190 discount area" noted analysts at Sucden, as fund and trade short positions were rolled forward.

New York arabica coffee futures for March settled at 136.50, the May contract finished at 138.40 cents per pound.

ICE raw sugar futures for May shrugged off the mixed moves in rest of the complex to finish up 0.9% at 17.96 cents.