COMMODITIES-Many gain on Fed's wider stimulus, wheat slumps

Wed Dec 12, 2012 5:20pm EST

* Fed plans for stimulus helps boost oil more than 1 pct
    * Gold, copper also up on Fed's ultra-low rates pledge
    * Cocoa outperforms, up 3 pct, on speculative year-end buy
    * Wheat at 5-mth low, dragged by USDA's Tuesday crop report

    By Barani Krishnan
    NEW YORK, Dec 12 (Reuters) - Oil, gold and copper closed up
on Wednesday after the Federal Reserve's plans for more monetary
stimulus weakened the dollar, boosting commodities that are
priced in the currency.
    Agricultural markets fell broadly. Wheat slid for a fourth
straight session and set a five-month low, extending Tuesday's
loss of more than 3 percent due to a U.S. government report
which forecast hefty future supplies.
    Cocoa was one crop that bucked the trend, rising 3
percent and even outperforming oil, as speculators built up a
large net-long position before year-end in both the London and
New York markets. Orange juice also gained, extending its
three-month highs from the last session. 
    The Thomson Reuters-Jefferies CRB index, which
tracks 19 commodity markets, rose 0.5 percent after the gains in
cocoa and oil were subdued by the broad losses in agriculture
and natural gas, among others. Arabica coffee and
raw sugar took the biggest hits, falling 2 percent each
to two-year lows.
    
    OIL RISES ON FED STIMULUS
    Crude oil rose on the Fed's extended stimulus plan and other
factors such as a refinery fire in Texas and continued turmoil
in the Middle East, the region that supplies most of the world's
oil.
    The Fed committed to monthly purchases of $45 billion in
Treasuries on top of the $40 billion per month in
mortgage-backed bonds it started buying in September. The euro
rose about half a percent against the dollar after the Fed's
announcement, which encouraged buying of dollar-denominated
commodities by those holding the single European currency.
 
    In Port Arthur, Texas, Motiva's refinery, the largest in the
United States, aborted a restart of its 350,000 barrel-per-day
(bpd) crude unit after a fractured pipe caused a fire overnight.
  
    In Syria, President Bashar al-Assad's forces were reported
to have fired Scud-style ballistic missiles against rebels in
recent days, escalating the 20-month civil war. 
    Further support for oil came from the International Energy
Agency, which substantially revised higher its estimate of
global oil demand for the last three months of this year, and
also said consumption would be stronger than previously forecast
in 2013. 
    "We were expecting the IEA to revise demand lower for next
year in this morning's report, so the fact that they didn't was
taken as a bullish signal," said Andy Lebow, vice president at
Jefferies Bache in New York. But he cautioned that overall
demand for OPEC's crude would still be lower in 2013 than 2012.
    Benchmark Brent crude oil in London finished up 1.4
percent at $109.50 a barrel. In New York, U.S. crude 
settled up 1.2 percent at $86.77. 
    
    GOLD JUMPS ON FED PLEDGE
    Gold prices jumped after the Fed said it will likely keep
official interest rates near zero for as long as unemployment
remains above 6.5 percent, inflation is no more than 2.5 percent
for the next one to two years, and inflation expectations remain
contained.
    "That's a bullish for gold for the Fed to say it will keep
interest rates low until unemployment rate drops to 6.5 percent
- it doesn't look that's going to happen anytime soon," said
Bill O'Neill, partner of New Jersey-based commodities investment
firm LOGIC Advisors.
    The spot price of bullion was up 0.6 percent at
$1,720.20 an ounce by 1:02 p.m. (1802 GMT) 
    U.S. gold futures for February delivery settled up
half a percent at $1,717.90 an ounce. 
    In copper, the benchmark three-month futures contract in
London rose 0.3 percent to $8,130 per tonne. Copper
futures in New York for March delivery settled up 0.8
percent at $3.7160 a lb. 
    
    GRAINS PRESSED BY USDA OUTLOOK
    Grains markets continued to suffer a day after the U.S.
Department of Agriculture raised its estimate of U.S. 2012/2013
wheat ending stocks due to the slow pace of exports. It also
increased its estimate of global inventories. 
    Wheat for March delivery in Chicago settled down 1.2
percent at $8.12 per bushel. 
    "Wheat is just trying to price itself as a feed grain. If
you can't export it, it's going to price itself into feed," said
Dan Cekander, analyst with Newedge USA in Chicago. 
    Wheat competes in the feed market with corn.
    Corn fell to a three-week low, with the March contract
 finishing down 0.3 percent at $7.25-1/2 a bushel after
touching $7.19. 
    
 Prices at 4:29 p.m. EST (2129 GMT)      
                             LAST/      NET    PCT     YTD
                             CLOSE      CHG    CHG     CHG
 US crude                    86.77     0.98   1.1%  -12.2%
 Brent crude                109.58     1.57   1.5%    2.0%
 Natural gas                 3.382   -0.030  -0.9%   13.1%
 
 US gold                   1716.60     8.40   0.5%    9.6%
 Gold                      1711.75     1.69   0.1%    9.4%
 US Copper                  370.00     2.90   0.8%    7.7%
 LME Copper                8130.00    30.00   0.4%    7.0%
 Dollar                     79.857   -0.204  -0.3%   -0.4%
 
 
 US corn                    721.00    -3.25  -0.5%   11.5%
 US soybeans               1473.50     1.50   0.1%   22.9%
 US wheat                   794.75   -11.00  -1.4%   21.8%
 
 US Coffee                  138.15    -3.00  -2.1%  -39.5%
 US Cocoa                  2490.00    56.00   2.3%   18.1%
 US Sugar                    18.54    -0.34  -1.8%  -20.2%
 
 US silver                  33.707    0.766   2.3%   20.7%
 US platinum               1644.90     6.40   0.4%   17.1%
 US palladium               699.65     4.35   0.6%    6.6%