“The rally in commodity prices in 2009 has been extraordinary – faster than normal and from a higher base,” said Patricia Mohr, an economics and commodity market specialist at Scotiabank in Toronto.

“Elements of the Asian-led ‘super-cycle’ have returned, with the China juggernaut leading the way. The revving up of China’s industrial activity from a low of only 3.8% year-on-year in January and February to 8.3% in March and then 19.2% in November has catapulted base metals into four of the top five best-performing commodities of 2009.”

“China now accounts for 38.8% of world consumption of the four key base metals compared with 10.3% by the US.”

According to Scotiabank analysts, in 2010 commodity prices should continue to move higher alongside the following developments: ongoing strength in China’s economy, with GDP expected to advance by 9.5%, up from this year’s estimated 8.3%; some re-stocking of basic materials across the G7, a development which has yet to occur; and continued interest by investors in commodities as an ‘asset class’, with interest shifting from passive, commodity-index investing to more active strategies, using hedge funds.

“While this year’s gains in commodity prices have been centred in exchange-traded commodities, the spring of 2010 should see increases in negotiated prices under annual contracts for coking coal and iron ore, and potash prices should start to rebound,” said Mohr.

On this side of the Atlantic, one of the first groups of City forecasters to come up with its commodity forecasts for 2010 is the team from banking group Standard Chartered.

This subject is important for the emerging market-focused bank because the economics of the areas in which it operates is intrinsically linked to commodity prices. The effect of rising food prices disproportionately affects these markets and mining for metals and oil can be significant contributors to gross domestic product.

In the first half of next year, the bank’s commodity team expects a rebounding dollar to put the brake on commodity prices. It also cites concerns over the sustainability over GDP growth as a major factor hitting sentiment “as the inventory-driven growth in the US moderates”.

The London-based bank sees investors paying more attention to the fundamentals of supply and demand for distinct commodities, with those that have tight supply outperforming.

However, Helen Henton, Standard’s head of commodity research, sees a year of two halves. The second half of the year is expected to see a weakening of the dollar and growth in the US, which should once again prompt commodities to outperform. In fact, between the fourth quarter of this year and the final quarter of 2010, there are only four major commodity classes that the bank expects will not be higher than the current price: nickel, soy beans, sugar and rice.

Nickel is expected to suffer from a glut of supply, with soy bean prices lower after a bumper harvest and increasing supplies. Sugar prices are forecast to fall on increased production from India and Brazil, after its 30-year high in September. The price of rice has upside risk, according to the bank. There are relatively comfortable stocks in Thailand and Indonesia but there is uncertainty over supply in the Philippines.

There are no surprises in the group’s favoured base metals – copper and lead supplies are the tightest in the market.

However, it sees the supply of aluminium and nickel expanding, so these are least favoured.

A resumption of the weakening dollar trend in the fourth quarter will leave gold averaging $1300 an ounce in the quarter, according to Standard’s calculations.

In soft commodities,

Standard expects corn to be the winner due to poor weather conditions in the US and China during the current growing season. It is also upbeat on the prospects for palm oil prices.

Of course, there is always the potential for surprises, but there is nothing controversial about Standard’s analysis. The two major factors that could derail these predictions are global growth (or lack of it) and significant moves in the dollar.

Not everyone agrees, however. Technical analysts at Commerzbank said recently that copper prices had become disconnected from fundamentals and there was a chance that the price could fall by up to one quarter.

Also, forecasts of the dollar’s prospects from JP Morgan Chase are slightly different than those of Standard Chartered.

The bank expects the dollar will fall to a record low next year on signs that the Federal Reserve will keep interest rates near zero until 2011. It sees the dollar weakening in the second quarter, but strengthening in the second half of the year by between 5% and 10%.

Unless there is another major crisis next year that derails the global recovery, it looks like most commodity classes are set for another good year in 2010 - but gains are unlikely to be as impressive as in 2009.