COMMODITIES-Prices of Valentine's tastiest raw materials down from 2010

Thu Feb 14, 2013 4:55pm EST

* Sugar at more than 2-year low; down 40 pct from Feb 2010
    * Cocoa near 8-month low, down 33 pct from three years ago
    * Gold, silver up sharply from 2010's commodity surge

 (Updates with closing prices)
    By Barani Krishnan
    NEW YORK, Feb 14 (Reuters) - Sugar and cocoa prices fell on
Thursday as did prices of gold and silver, but the commodities
behind some of Valentine's Day gifts have taken different paths
from three years ago, with the sweets lower and the shiny items
higher in price.
     A sell-off in corn, whose syrup is used to sweeten hundreds
of food products, and in wheat, without which cakes and astries
cannot be made, also accelerated.
     Some of the most precious materials used in Valentine gifts
are a lot costlier than in 2010, when commodity markets
rebounded faster-than-expected and posted their last annual gain
since the financial crisis.
    The price of gold, for instance, is above $1,640 an
ounce, about $500, or nearly 45 percent, more than three years
ago. It hit a six-week low on Thursday, before recovering to
close slightly lower. 
    Silver, which fell 1.0 percent on Thursday to around
$30 per ounce, is about 75 percent higher than in February 2010.
    Other metals used in jewelry-making like platinum and
palladium are also much pricier than three years back.
    But the average commodity, best measured by benchmark
indexes such as the Thomson Reuters-Jefferies CRB, is
trading below 2010 levels, showing the cyclical nature of the
asset class and the overall difficulty faced in recapturing the
2005-2008 boom years.
    
    SUGAR, COCOA IN OVERSUPPLY     
    Cocoa, chocolate's raw material, and sugar are good
examples, trading at least a third below their February 2010
levels, due to oversupply and a less-than-certain outlook for
demand. 
    "These things will definitely go up again in price, but they
need time as growers will first have to plant less to ensure
there's more demand than supply at the next harvest," said Nick
Gentile, trader at Atlantic Capital Advisors in Jersey City, New
Jersey.
    Raw sugar's benchmark front-month contract in New York
 fell 2.0 percent to below 18 cents a lb for the first
time since August 2010, and dealers said surplus supplies could
drive prices even lower.
    Compared to three years ago, the contract is down about 40
percent. Sugar is the worst performing commodity on the CRB
index this year, falling nearly 7.0 percent, as it struggles to
absorb a third season of overproduction.
    In cocoa, the second-month contract in New York fell
0.6 percent on the day to close at $2,156 a tonne, near an
8-month low. Compared to February 2010 highs, it is down 33
percent.
    Coffee, like sugar, fell to the lowest level in more than
two years, with the premium arabica grade finishing at
$1.4160 a lb in New York.
    
    CORN, WHEAT HIT BY FRIENDLY WEATHER
    Corn futures in Chicago closed a shade lower at $6.29 a
bushel, ending down for a 10th straight session. It was the
longest string of declines since 2007, due to crop-friendly
weather in South America and expectations of higher supplies.
    "We're certainly seeing improved forecasts for South
America, forecasts for more rain in Argentina and in southern
Brazil," said Rich Nelson, a grains analyst with Allendale Inc
in McHenry, Illinois. 
    In wheat, improving U.S. weather conditions and fund selling
overshadowed strong weekly U.S. export sales data. Front-month
wheat in Chicago slipped 3-1/2 cents, or 0.5 percent, to
$7.32 a bushel.
    
    PLATINUM, PALLADIUM HALT RALLY
    Platinum fell around 1.0 percent for the session, with the
benchmark contract settling at around $1,710 an ounce in New
York. It was at below $1,600 in February 2010.
    Contrary to the trend in sugar and other crops, platinum has
mostly rallied since the start of the year as funds chased up
prices of the jewelry- and autocatalytic- making metal deemed to
be in short supply.
    Platinum is up 10 percent on the year, hitting a near
17-month high above $1,740 a week ago.
    Palladium, a part of the platinum group metals(PGMs), was
also down 1.0 percent at around $764 an ounce. It had
surged to $775 -- a high since Sept. 2011 -- in Wednesday's
session and is up 8 percent for the year. It traded below $450
three years ago.
    
 Prices at 4:32 p.m. EST (2132 GMT)      
                             LAST/      NET    PCT     YTD
                             CLOSE      CHG    CHG     CHG
 US crude                    97.30     0.29   0.3%    6.0%
 Brent crude                118.02     0.14   0.1%    6.2%
 Natural gas                 3.163   -0.143  -4.3%   -5.6%
 
 US gold                   1634.70    -9.50  -0.6%   -2.5%
 Gold                      1633.89    -8.47  -0.5%   -2.4%
 US Copper                  373.75    -0.50  -0.1%    2.3%
 LME Copper                8240.00    14.00   0.2%    3.9%
 Dollar                     80.386    0.299   0.4%    4.7%
                             
 
 US corn                    694.75    -0.75  -0.1%   -0.5%
 US soybeans               1418.00    -5.00  -0.4%   -0.1%
 US wheat                   732.00    -3.50  -0.5%   -5.9%
 
 US Coffee                  138.00    -0.75  -0.5%   -4.0%
 US Cocoa                  2129.00   -14.00  -0.7%   -4.8%
 US Sugar                    17.94    -0.29  -1.6%   -8.0%
 
 US silver                  30.353   -0.516  -1.7%    0.4%
 US platinum               1709.80   -18.80  -1.1%   11.1%
 US palladium               764.05    -8.00  -1.0%    8.6%
 

 (Editing by Bob Burgdorfer)
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