COMMODITIES-Down as US fiscal worry returns;oil snaps 3-day rise

Thu Dec 13, 2012 4:52pm EST

* Fiscal cliff, market liquidation weigh on prices
    * Brent crude down 1.5 pct, snapping 3 days of gains
    * Wheat extends 5-day slide, sets new 5-month low
    * Corn down for a 6th day; sugar, arabica at 2-year low
    * Gold down 1 pct, first time below $1,700 oz this week

    By Barani Krishnan
    NEW YORK, Dec 13 (Reuters) - Commodities fell broadly on
Thursday, with oil and key metals markets ending down, as a U.S.
fiscal deal seen crucial for preventing a recession in 2013
remained elusive before the year-end deadline.
    Market liquidation ahead of the year's close, as players
locked in profit, and concerns about weakening grains exports
and bloated inventories for sugar and coffee, also weighed on
prices, traders said.
    In grains, wheat futures extended a five-session
decline and set a fresh five-month low. Corn slid for a
sixth day as technical selling and sluggish export demand
weighed on both. 
    Among other crops, raw sugar and arabica coffee
 hit their lowest levels in more than two years on
concerns about surplus supplies. 
    Orange juice was one market that bucked the broadly
lower trend in commodities, rising nearly 3 percent to hit highs
not seen since April.
    The Thomson Reuters-Jefferies CRB index settled
down 0.9 percent after 14 of the 19 markets on the commodities
bellwether ended lower. Silver led the CRB's losses,
falling 3 percent for its biggest one-day decline in a month, as
technical selling weighed on the metal. [GOL/}
    
    OIL SLIDES ON FISCAL CLIFF WORRY
    In oil, benchmark Brent crude traded in London 
settled down 1.5 percent at $107.91 a barrel, snapping three
straight days of gains, as U.S. President Obama and his
Republican rivals in Congress appeared nowhere near a fiscal
deal. 
    Speaker of the U.S. House of Representatives John Boehner,
the lead Republican in Congress, charged that the White House
seems willing to "slow-walk our economy right up to - and over -
the fiscal cliff." 
    The fiscal cliff refers to some $600 billion in automatic
tax hikes and spending cuts that would come on board in January
if a deal to avert it is not struck by Dec. 31.
    Worries over the stalled talks even offset encouraging data
on U.S. retail sales and jobless claims.
    "The U.S. data took our minds off the fiscal cliff for a few
moments, but the possibility that going over the cliff might
cause a recession continues to limit crude prices," said Phil
Flynn, an analyst for oil at Price Futures Group in Chicago.
    High stockpiles of oil and relatively warm U.S. temperatures
-- which lowers the need for heating oil and natural gas
consumption -- was also weighing on energy markets, Flynn said.
    
    GOLD PRESSURED BY IMPROVING U.S. JOBS SITUATION 
    Three-month copper in London closed down 0.7 percent
at $8,074 a tonne, from a last bid of $8,130 on Wednesday, when
it edged up 0.3 percent. 
    In gold, the spot price of bullion fell 1 percent to
below $1,700 an ounce for the first time this week, on fears
that the Federal Reserve might withdraw its economic stimulus if
the U.S. jobs market improved dramatically. 
    The Fed pledged on Wednesday to keep official U.S. interest
rates at near zero for as long as unemployment remained above
6.5 percent.
    "With the economy showing some signs of recovery, we may see
a 6.5 percent unemployment rate sooner than previously
anticipated, so longer-dated funds that are heavily invested in
metals are looking to reduce their gold positions," said Phillip
Streible, senior commodities broker at futures brokerage R.J.
O'Brien.
    
 Prices at 4:10 p.m. EST (2110 GMT)      
                             LAST/      NET    PCT     YTD
                             CLOSE      CHG    CHG     CHG
 US crude                    86.26    -0.51  -0.6%  -12.7%
 Brent crude                108.30    -1.20  -1.1%    0.9%
 Natural gas                 3.347   -0.035  -1.0%   12.0%
 
 US gold                   1695.60   -21.00  -1.2%    8.2%
 Gold                      1695.76   -15.79  -0.9%    8.4%
 US Copper                  364.45    -5.55  -1.5%    6.1%
 LME Copper                8074.00   -56.00  -0.7%    6.2%
 Dollar                     79.918    0.103   0.1%   -0.3%
 
 
 US corn                    712.25    -8.75  -1.2%   10.2%
 US soybeans               1476.50     3.00   0.2%   23.2%
 US wheat                   793.00    -1.75  -0.2%   21.5%
 
 US Coffee                  135.25    -2.90  -2.1%  -40.7%
 US Cocoa                  2452.00   -38.00  -1.5%   16.3%
 US Sugar                    18.54     0.00   0.0%  -20.2%
 
 US silver                  32.280   -1.427  -4.2%   15.6%
 US platinum               1611.90   -33.00  -2.0%   14.7%
 US palladium               690.25    -9.40  -1.3%    5.2%
A couple walks along the rough surf during sunset at Oahu's North Shore, December 26, 2013. REUTERS/Kevin Lamarque

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