COMMODITIES-Oil seesaws, copper up, as markets eye fiscal cliff

Fri Nov 30, 2012 12:55pm EST

* Brent crude choppy as investors track fiscal cliff talks
    * Copper hits 5-week highs on dollar weakness, China economy
    * Wheat tumbles after US exports of the grain shrink

    By Barani Krishnan
    NEW YORK, Nov 30 (Reuters) - Oil prices seesawed on Friday
while copper hit a five-week high as investors looked out for
U.S. lawmakers to work toward a budget deal and avoid the
so-called "fiscal cliff" that threatens to severely harm the
world's largest economy.
    Wheat and soybeans prices fell sharply due to
weaker-than-expected U.S. export sales.
    Gold headed lower too, cutting short Thursday's rebound
after its tumble earlier in the week. 
    The 19-commodity Thomson Reuters-Jefferies CRB index
 was down nearly half a percent, but poised to finish
November up about 1 percent. In October, the benchmark index
slid more than 4 percent, while it finished about flat in
September.
    The November rebound has been largely due to a pick up in
oil and copper prices from oversold conditions in October.
    Analysts tracking energy and metals said they still expected
a positive year in the two sectors if U.S. lawmakers can reach a
deal in Congress to prevent $600 billion worth of tax hikes and
spending cuts from kicking in in 2013.
    "If the fiscal cliff can be avoided, prices should
increase," Carsten Fritsch, an oil analyst in London for the
Frankfurt-based Commerzbank.
    As of Friday, oil's benchmark Brent crude in London was up 3
percent for the year. Copper futures in both London and New York
showed a 5 percent annual gain.
    Brent hit a two-week low on Wednesday on fear the budget
talks were at a stalemate. It rebounded the next session after
U.S. House of Representatives Speaker John Boehner and President
Obama expressed confidence a deal could be brokered.
    By 11:48 a.m. EST (1648 GMT) , Brent was down 0.2
percent at $110.57 a barrel. U.S. crude was up 0.4
percent at $88.40.
    
   

    FIRST MONTHLY GAIN SINCE SEPT FOR COPPER
    Copper traded at its highest levels since late October, on
track to its first monthly gain in two months.
    Aside from optimism that the U.S. fiscal problems could be
resolved before the year-end, the rally in copper was supported
by a weaker dollar against the euro and growing confidence in
the economic outlook of top metals buyer China, dealers said.
    Copper's three-month futures contract in London was
up 1 percent, hovering above $7,980 a tonne, after setting a
five-week high at $7,995.
    The base metal's futures in New York was also up by
about 1 percent, trading at above $3.6170 a lb.
    The euro hit a five-week high against the dollar
, bolstered partly by the approval of the latest Greek
bailout deal by German lawmakers. 
    In China, economists polled by Reuters said they expected
factory activity for November to have expanded at its fastest
pace in seven months, reinforcing views that recovery in the No.
2 economy is entrenched going into the final quarter.
 
    
    WHEAT SLUMPS ON WEAK EXPORTS
    Wheat futures fell nearly 2 percent in Chicago trading,
heading for their second straight monthly decline, due to
disappointing U.S. exports. 
    Corn and soybean futures also traded lower in Chicago and
were on track for consecutive monthly declines as traders took
month-end profits.
    Until earlier this week, Chicago wheat had been on a climb,
hitting a two-week high on Tuesday after a record low rating for
the crop's conditions in the United States.
    The higher prices had, however, led to lower demand in the
physical market, pushing U.S. wheat exports last week to their
lowest levels in three weeks.
    "We rallied the market up on anticipation of export demand
and we rallied away from the export price," Charlie Sernatinger,
analyst at ABN Amro in Chicago, said of the wheat market.
    The most active March wheat contract on the Chicago Board of
Trade fell 2.5 percent to $8.63-1/2 a bushel. CBOT
soybeans for January eased 1.1 percent to $14.31-3/4 per
bushel.
    
 Prices at 12:32 p.m. EST (1732 GMT)                      
 
                              LAST      NET    PCT     YTD
                                        CHG    CHG     CHG
 US crude                    88.46     0.39   0.4%  -10.5%
 Brent crude                110.73    -0.03   0.0%    3.1%
 Natural gas                 3.605   -0.043  -1.2%   20.6%
 
 US gold                   1716.90   -10.30  -0.6%    9.6%
 Gold                      1716.81    -7.98  -0.5%    9.8%
 US Copper                  362.20     3.35   0.9%    5.4%
 LME Copper                7987.00    95.35   1.1%    5.1%
 Dollar                     80.128   -0.076  -0.1%   -0.1%
 
 
 US corn                    743.75    -7.75  -1.0%   15.0%
 US soybeans               1431.50   -16.50  -1.1%   19.4%
 US wheat                   845.25   -24.00  -2.8%   29.5%
 
 US Coffee                  141.80    -4.35  -3.0%  -37.9%
 US Cocoa                  2497.00     6.00   0.2%   18.4%
 US Sugar                    19.32    -0.02  -0.1%  -16.8%
 
 US silver                  33.640   -0.708  -2.1%   20.5%
 US platinum               1611.60    -7.90  -0.5%   14.7%
 US palladium               678.20    -7.00  -1.0%    3.4%
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