Commodity markets were on course for their strongest year since 1973 - analysts.
Commodity markets were on course for their strongest year since 1973, lifted by oil's biggest annual gains in a decade and a more than doubling in copper and sugar prices.
The Reuters/Jefferies CRB index was on track for a 24 percent rally in 2009. Gold headed for its ninth increase in as many years. White sugar touched record highs on Thursday and cocoa headed for its fourth annual rise.
But the strategies that worked in 2009 may fail in the coming year as the market switches from picking up bargains left in the wake of the financial meltdown that started in 2008.
"2009 was really a value proposition, it was about momentum buying on value, which was buying on cheapness in the market," said Mark Pervan, head of commodity research at ANZ.
"2010 is going to be much more macro driven, more fundamentally driven. You won't see so much influence from the dollar. It will be more closely aligned with supply and demand."
First among CRB constituents was copper, heading for a rally of nearly 140 percent in 2009.
Unprecedented levels of Chinese imports, speculative fervour and more lately, threats to supply, have pushed London copper from a 50-month low of $2,825 in December last year to a 16-month peak of $7,415 on New Year's Eve.
Injecting extra fizz was the imminent strike by workers at Chile's giant Chuquicamata mine, who were preparing to down tools within days after owner Codelco, the world's No. 1 copper miner, refused to back down in a wage negotiation dispute.
Even the arrival of 10,000 tonnes of copper in LME warehouses on Wednesday, the biggest increase in percentage terms since September, bringing stocks to just shy of half a million tonnes, was not enough to cool investors' ardour.
Peng Qiang, an analyst at COFCO Futures, said: "The upward trend in the market remains, despite the jump in LME copper stocks yesterday and the firm dollar."
Sugar was another standout in 2009 - up the best part of 130 percent.
White sugar futures hit a record of $710.40 per tonne on the last day of 2009 and raw sugar nudged close to a 29-year high touched earlier in the week. Both whites and raws were driven higher by Indian demand after a poor crop.
Sugar prices should stay well-supported in 2010, powered by expectations of strong import demand in Asia, as well as Russia and the United States, dealers said.
"There's nothing to suggest that we've seen the top for this sugar rally yet," said Nick Hungate, a senior soft commodities trader with Rabobank in London.
"If the market goes to 30 cents a lb, then there's no reason why it can't go to 32 or 35 or even higher."
ICE March raw sugar futures were up 0.20 cent or 0.74 percent to 27.16 cents a lb at 1134 GMT, having hit a 29-year high of 27.49 cents on Tuesday, over double the 11.81 cents a lb touched on the last trading day of 2008.
Commodity markets could be set for a strong start to 2010.
Gold, which was at $1,104.35 an ounce at 1103 GMT, is on track to post a 25 percent gain this year after hitting a peak of $1,226.10 in early December, and may benefit from fresh flows early in the New Year, traders in Europe and Australia said.
In the longer term analysts said it could be vulnerable to a continued recovery in the dollar, pulling back some of a sharp drop which still sees it down some 4 percent this year.
"It seems like we are seeing a change in perspective for the dollar heading into the New Year, and that is going to be a very interesting one to follow," Saxo Bank senior manager Ole Hansen told Reuters in late December.
Hansen said he was positive on the prospects for commodities in early 2010. "The investment flow into commodities is expected to continue at the same kind of pace we saw this year, which leaves them with nowhere to go but the upside."
Oil prices have also surged, up nearly 80 percent in the year, but the market would need to rally an additional more than 80 percent to top its record high of last year near $150 a barrel.
U.S. crude for February delivery rose 51 cents, or 0.64 percent, to $79.79 a barrel by 1105 GMT, just shy of the psychologically key $80 mark. Prices have risen 14 percent in just over two weeks.
On the downside, grains failed to inspire this year - wheat has tumbled 11 percent, while corn managed a paltry 1.5 percent rise.
Soy rose 6.5 percent for the year, with strong demand led by top buyer China and poor supplies from Latin America countered by a record U.S. harvest.
Analysts said expectations of bumper soy production in South America will likely weigh on soy's 2010 outlook. (Reuters)