RPT-Shrewd forecasters win in a volatile commodities world
(Repeats story from Friday)
* Commodity volatility whipsaws Thomson Reuters-Jefferies CRB Index
* Mideast violence, U.S. budget worries yank oil prices
* South African mine violence propels gold
By Susan Thomas and Veronica Brown
LONDON, Jan 11 (Reuters) - Drought, recession and political upheaval rocked commodity markets and confounded price forecasters last year, but at least some got it right, even if guess-work sometimes overtook mathematical calculations.
At the start of 2012, no one could have foreseen the drought that decimated a historically high planted area for U.S. corn, or deadly violence in the Middle East and in South Africa's mining sector, or the extent of China's economic slowdown.
A brutal sell-off in May across markets last year pulled the Thomson Reuters-Jefferies CRB index for commodities down 11 percent that month, followed by a violent snap-back in June, and a fall of more than 3 percent for the year.
Funds and banks trading a whipsawing oil price struggled. Heightened worries about the U.S. budget talks weighed on prices just as Iran's nuclear programme and violence in Syria supported prices, making for volatile trading.
In 2012, oil prices averaged $111.68 per barrel for Brent and $94.15 per barrel for WTI, and most of the bigger banks who participated in a Reuters poll last January got it wrong.
But a Portuguese commercial bank, Banco BPI, with a market capitalization of less than $2 billion, was right with its forecast of $112 for Brent and $94 for WTI.
"At the start of 2012 we were a little pessimistic because we knew that China would see a drop in growth....focused on what kind of slowdown it will face," Banco BPI analyst Agostinho Leal Alves said. "In the end, it was a soft landing."
For 2013, he sees Brent averaging $118 and WTI $102 on expectations of higher economic growth in China and the United States, as well as conflicts in the Middle East.
Gold had a tumultuous 2012 but still eked out a 12th successive year of gains, even as some investors headed for the exit due to indecision over the market's status as a safe-haven from economic volatility caused by Europe's debt crisis and U.S. budgetary jitters.
A super-low global interest rate environment and additional policy easing from leading central banks proved key.
Even without another outright record high, gold prices averaged $1,668 per ounce last year, based on the Reuters spot closing price. The forecast from Michael Wagner at Volkswagen AG was closest at $1,675 per ounce.
The London Bullion Market Association's (LBMA) arch soothsayer Ross Norman, having been the most accurate in the metal's more than decade-long bull-run, admitted that getting it right is no longer a pure number-crunching exercise.
"To get a full sense of where the market is going now is less of a science and more of an art. It seems to be driven more by sentiment than hard data," he said.
The uncertain outlook for the global economy, coupled with sluggish demand from top commodities consumer China, drew a consensus for a small rise in the copper price last year from 32 analysts surveyed in a Reuters poll last January.
But many of those surveyed were not pessimistic enough. The consensus showed the cash copper price would average $8,369 a tonne last year, around $400 higher than the final 2012 average of $7,958.
Societe Generale, however, was almost bang on with its prediction of an average cash copper price of $7,950. The bank sees the average cash price slightly higher at $7,975 this year.
"In the first half we see a rebound in China," Societe Generale analyst Robin Bhar said.
"That may start to hit structural head winds in the second half as China transitions from export-led economy to being domestically led, trying to encourage domestic demand. That could maybe slow the economy in the second half."
The U.S. drought propelled wheat prices up 40 percent between mid-June and July, and corn more than 60 percent between June and mid-August, wrong-footing most 2012 forecasts by analysts who participated in a poll at the beginning of last year.
The final spot CBOT corn price on Dec. 31 last year was $6.98-1/4 per bushel, wheat was $7.78 per bushel, and soybeans was $14.18-3/4 per bushel.
Tim Hannagan, who was at PFG Best at the time of the Reuters survey, had the closest forecast for an end-year price for corn at $5.90, or $1.08 below the final price. Reuters agricultural commodity polls are all based on end-year prices.
Hannagan, now a grain specialist for Alpari US LLC, said he was lowering his corn price outlook for end-2013.
"Based on what I think plantings and weather will be and based on the current administration's policies, without any major surprise I'm looking at $5.30," Hannagan said.
For wheat, Chris Manns, president of Chicago brokerage Traders Group Inc, was the closest with his prediction of $8.30, or 52 cents above the final price.
For end-2013, Manns forecasts a wheat price of $7.50, near its current level.
"I get the feeling there is going to be a lot of wheat around. I know Australia is drying out a little bit, but the old adage says 'wheat is a weed'," Manns said.
"In this country (the United States), it's not looking too good either. But I think we are going to see a lot of wheat around, globally."
For soybeans, Goldman Sachs had the most accurate forecast at $12.15, or $2.03 under the final price.
The winner on coffee was J. Ganes Consulting LCC with a forecast in a January 2012 poll for an end-year price for ICE spot arabica coffee futures of 175 cents a lb. The end-year price was 143.80 cents.
"The market is starting to dig into levels that should provide some underpinning and I would expect the downward slide to subside," Judy Ganes-Chase said.
She added that a large Brazil crop and unsold coffee "is still a negative feature" and forecast coffee at $1.45 per lb at the end of the first quarter and $1.40 at the end of 2013.
For sugar, Julio Borges of JOB Economia was most accurate with an end-year price of 20 cents. The actual end-year price was 19.51 cents.
The average price of EU carbon permits (EUAs) in 2012 was 7.50 euros. Deutsche Bank and Schwarzthal Capital both forecast 8 euros for 2012 in a December 2011 poll.