LONDON (Commodity Online): Agricultural markets are trading mostly higher this morning supported by a pickup in China’s PMI data. Macro data and the vagaries of broader sentiment continue to be the key price driver for now, stated Barclays Capitals.

Released on Monday, China’s September trade data shows strength in cotton, wheat, Sugar and Corn imports. China’s Cotton imports which have been weak over recent months came in at 252.7Kt – their highest level since March 2011. China also stayed a significant net sugar importer, at 465Kt, with imports rising successively for the past four months.

Due to a poor domestic crop in the key sugar-producing region of Guangxi, China's sugar imports are likely to stay elevated over coming months as it faces a domestic shortfall. In corn, a market where China's import reliance is rising, imports in September came in at 181.1Kt – down by 26% m/m, but with exports modest at 10.2Kt and down m/m, China stayed a sizeable net importer, at 171Kt.

China's Wheat imports were elevated, at 176.95Kt, coming in at their loftiest level since June (which was the highest level for imports since July 2007). Finally, China's soybean imports at 4.12Kt were down by 9% m/m but broadly in line with the average of 2011 imports so far.

According to Barclays Latest CFTC data for the week-ending 18 October showed that in contrast to recent weeks, tactical investors held a largely positive view on agricultural commodities, reducing negative exposure only to wheat, soybean meal and cocoa.

Across the CBOT grains, non-commercial net fund length in Corn rose by 6.3K lots to 241.7K lots, with the establishment of fresh long positions (7.9K lots) more than offsetting the addition of fresh short positions (1.6K lots). Net fund positions in CBOT Wheat fell by 4.4K lots and deeper into net short territory, at -52.6K lots, with the addition of net short positions (7.8K lots) dwarfing the establishment of fresh long positions (3.4K lots).

Across the soybean complex, net fund positions in soybeans rose by 8.2K lots and by 4K lots in Soybean Oil while falling by 6K lots in soybean meal. Net fund positions in both soybean meal and soybean oil stayed in negative territory, at -15.7K lots and -6.8K lots respectively.

Across the ICE soft commodities, net fund positions continue to flip about. Net fund positions fell back into positive territory in the week ending 11 October, while the latest data showed net fund positions falling by 0.2K lots to 0K lots. Notably, net fund length in Sugar rose by 20K lots to 112K lots on a combination of the establishment of fresh long positions (13.7K lots) and short covering activity (6.2K lots), bank stated.

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