Farm commodities rose on Monday, while oil and metals fell after a meeting of the Group of 20 major economies failed to take concrete steps to tackle a global slowdown that threatens industrial raw materials demand.
Governments from Washington to Beijing agreed on Saturday to a raft of fiscal and monetary steps to rescue the global economy but it was left to individual governments to tailor their responses to their particular circumstances and troubled industries.
"I think there's a preference for cash at the moment," said David Moore, commodities analyst at Commonwealth Bank of Australia in Sydney.
The poor outlook for commodities given the slumping global economy is reflected in the Reuters-Jeffries CRB index <.CRB>, which fell to its lowest since October 2003 last week.
It also showed up in the rush of speculators to exit commodity futures, with the net speculative long position across U.S. commodities futures falling 67 percent from the previous week to its lowest in 3-½ years.
But supply worries lifted farm commodities, with grains prices up as dry weather hit wheat output in Argentina and with a lack of rains also causing concern over the Brazilian soybean crop.
"There is a view out there that we may have found a bottom and people don't want to get caught short," ANZ's soft commodity strategist Doug Whitehead said.
"There is also probably a bit of support as Argentina is still pretty dry and also some concerns over the Brazilian soybean crop which will create a bigger reliance on Argentine supply in terms of South American exports."
Chicago Board of Trade January soybeans rose 0.6 percent to $9.01-¾ a bushel by 0807 GMT, December corn was up 0.9 percent at $4.00 ¼ a bushel while December delivery wheat fell 0.7 percent to $5.50-¼ per bushel.
Investors had also cashed in gold to cover losses in equities as they braced for a third straight week of losses on Wall Street.
Gold steadied after early falls, trading at $741.75 an ounce, up $0.40 from New York's notional close on Friday.
OIL, METALS SLIP
It was industrial raw materials, those most directly exposed to economic activity, that showed the greatest losses.
Oil slipped more than $1 to below $56 a barrel to near its weakest in almost two years on recession fears.
News that the Organization of the Petroleum Exporting Countries (OPEC) may wait until its meeting on Dec. 17, instead of the end of November, to make a decision on whether to cut production targets again also weighed on prices.
London copper futures fell more than 2 percent to $3,733 a tonne, reversing some of Friday's 5 percent gains.
"There isn't a slice of good news out there and I think people are still under-estimating how low industrial production will go in this downturn and for how long prices will stay weak," a Sydney-based metals trader said.
Australia's Macquarie Bank cut its price outlooks for metals, slashing its 2009 forecast for copper by 43 percent to an average 170 cents a pound ($3,748 a tonne). It also lowered its outlook for aluminium next year by 31 percent to 90 cents a pound.
"We now see surpluses developing in many of the major metal markets in the very near term, which is likely to sustain a strong shift in pricing and producer behaviour," said Macquarie Research in a note. (Additional reporting by Naveen Thukra, Lewa Pardomuan and Nick Trevethan in SINGAPORE, and Fayen Wong in PERTH)
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