* Natural gas up 32 pct in 2013, oil gains 8 pct
* Corn worst performer with 40 pct decline
* Copper near 4-month peak, aluminium near 2-month high
By Naveen Thukral
SINGAPORE, Dec 31 (Reuters) - Natural gas is set to be the best performing commodity in 2013 with U.S. oil also gaining, but gold is facing its biggest fall since 1981 as commodities end the year with all eyes on signs of a global economic pick-up.
Corn has suffered the most in 2013 with losses mounting to nearly 40 percent as record U.S. production boosts global supplies, while major consumer China is cutting back on expected imports.
For 2014, investors in commodity markets are focusing on an improved economic outlook in top consumers the United States and China, although increased supply may spoil the party, particularly for oil and copper.
"This optimism that we are living through will help support commodity markets in the first and second quarters," said Jonathan Barratt, chief executive of commodity research firm Barratt's Bulletin in Sydney.
"It should provide an undercurrent of strength."
U.S. natural gas futures have climbed steeply amid fresh signs of chilly winter weather and stronger than usual seasonal demand with the front month contract up nearly 26 percent since Nov. 1.
If drawdowns for the rest of the heating season match the five-year average pace, it would result in the lowest end-winter inventory since 2008. That could help prop up prices next year as utilities scramble to rebuild stocks.
U.S. oil prices are on track to end the year up 8 percent, recouping a 7 percent decline in 2012, but could come under pressure as the U.S. shale oil boom curbs imports by the world's largest oil consumer.
Brent futures held above $111 a barrel on Tuesday on worries of a prolonged outage from OPEC member Libya. The benchmark is set to end the year nearly flat in a year where supply disruption fears have offset concerns of weak demand.
Gold, which has lost 28 percent in 2013, is heading for its biggest annual decline since 1981 as investors ploughed money into equities, where the Dow Jones Index has jumped 26 percent and Japan's Nikkei surged nearly 60 percent.
Holdings in SPDR Gold Trust, the world's largest gold-backed exchange-traded fund fell 40 percent in 2013 to their lowest level since 2009 as investors lost faith in bullion as a hedge against inflation, anticipating the U.S. Federal Reserve's move to trim its commodity-friendly bond purchases.
"For the next quarter, precious metals as a whole still look weak," said Brian Lan, managing director of GoldSilver Central Pte Ltd in Singapore. "The U.S. economy will look to recover and the stock market is also looking much more attractive at this moment."
Expectations of revived growth in China have pushed London copper to four-month highs, while aluminium is hovering near a two-month top.
But even though copper has almost gained 5 percent in December, the market is still down nearly 7 percent this year. Ample copper concentrate expected to flow into the market next year could cap gains fuelled by growth prospects.
In agricultural markets, U.S. corn futures have fallen nearly 40 percent, the biggest annual slide on record, following a bumper global crop, including a rebound in U.S. production.
Adding to corn's woes, China has rejected more than half a million tonnes of U.S. corn - citing unapproved genetically modified strains - and has imposed strict checks as Beijing seeks to curb cheap imports and support domestic prices. (Reporting by Naveen Thukral; Editing by Richard Pullin)