Commodities crumbled Tuesday, falling by their most in eight weeks as energy, metals and agricultural investors unwound much of the heady gains made on thin holiday volume over the past two weeks.

The Reuters-Jefferies CRB index dropped 2 percent in its sharpest one-day fall since mid-November after investors and traders worldwide returned to work from holidays to find many markets had run up to their highest in two years or more.

Crude oil fell more than 2 percent on Tuesday while soybeans dipped almost 1 percent, both having hit their highest since mid-2008 in recent days. Soft commodities fell harder, with cocoa down more than 3 percent.

Copper fell 2 percent in New York, its sharpest drop since Dec. 15, after having hit a succession of record highs as traders figured the constrained supply and a lack of substitutes made it one of the top picks for 2011.

Activity across all markets picked up dramatically as traders returned from holiday, with volume at mid-session already in excess of any day over the past two weeks.

By the look of things, many investors were discovering that prices had moved too far, too fast, with too little trade.

"It's a healthy correction in copper," said Sean McGillivray, vice president at Oregon-based Great Pacific Wealth Management.

"I would fully expect a little bit of profit-taking by the institutional investors, especially in the precious metals sector in the first of the year."

The 19-commodity CRB rose 15 percent in 2010, with an over 10 percent gain in December alone, the best month since May 2009 when commodities were rebounding from their lows.

Some of its key components, like crude oil and soybeans, ended at their highest levels since the start of the financial crisis. Markets like copper and cotton hit record highs despite daily volumes less than a third of the norm.

While a modest bounce in the dollar appeared partly to blame on Tuesday, analysts also cited the fact that recent data from Asia — the bedrock of the commodities rebound since the financial crisis — had been less than supportive, despite an improvement in U.S. and European indicators.

"The few macro items that have been released thus far over the past few weeks have been mixed in tone, and strangely, the weaker numbers are — for a change — coming out of Asia," said Ed Meir, senior commodities analyst at MF Global in New York.

"The weaker Asian macro numbers have not done much to derail the advance, but we have to suspect that additional reports like this will be increasingly difficult to ignore."

China, the world's No. 2 economy and a giant consumer of oil, metals and grains, reported that its manufacturing sector grew at its weakest pace in three months in December.

Beijing's latest purchasing managers' index — a key measure of inflation and growth — also saw its first decline in five months after China ramped up moves to rein in its runaway economy.