COMMODITIES-Markets dive on US budget cuts,dollar;oil down on yr

Fri Mar 1, 2013 3:27pm EST

* CRB index hits 7-1/2 month bottom
    * Brent oil down more than half pct on the year
    * Copper trades below $7,652/ton, a 3-month low
    * Cocoa, sugar down nearly 3 pct each; gold joins slide

    By Barani Krishnan
    NEW YORK, March 1 (Reuters) - Commodities tumbled on Friday,
with oil entering negative territory for the year and copper
hitting a three-month low, after U.S. budget cuts and a surging
dollar triggered worries about raw materials demand.
    Cocoa and sugar were among other commodities
that fell sharply, losing nearly 3 percent each, after data
showing weakness in European manufacturing and cooling growth in
Asia. 
    The Thomson Reuters-Jefferies CRB index, the
commodities bellwether, fell nearly 1 percent, to a 7-1/2 month
low. Orange juice tumbled the most among the CRB's 19
components, losing 5 percent.   
    The sell-off was sparked by market jitters related to the
political gridlock over the U.S. budget, where rival Democrats
and Republicans set off $85 billion in automatic spending cuts
known as "sequestration". 
    The International Monetary Fund has warned that the cuts
could knock at least 0.5 percentage points off U.S. economic
growth this year and weigh on the rest of the global economy.
    "Despite some green shoots in the United States, the growth
forecast remains mediocre, unemployment stubbornly high and
economic data inconsistent," oil brokerage PVM said in a note to
clients.
    The strong dollar was another factor discouraging those
holding other currencies like the euro and yen from buying
dollar-denominated commodities. The euro fell to a 2013
low while the dollar itself hit a 6-month high against a basket
of major currencies. 
    
    GOLD JOINS OIL, METALS SLIDE
    In oil, benchmark Brent crude traded in London 
closed down 98 cents, or almost 1 percent, at $110.40 a barrel.
It fell to a six-week low below $110 during the session.
    Brent has dropped more than $9 a barrel over the last three
weeks since it hit a nine-month high of $119.20. It is now down
0.6 percent for the year.
    U.S. crude settled down 1.5 percent at $90.68 per
barrel, after hitting a low of $90.44 earlier in the session,
its weakest since December. 
    Copper fell to its lowest in more than three months after
data from top metals importer China showed slowing factory
growth.
    Three-month copper traded in London touched its
lowest since November last year at $7,652 a tonne, and ended
down at $7,700, versus a closing bid of $7,815 on Thursday.
Prices fell more than 4 percent in February.
    Tin, nickel, zinc, lead and aluminium prices all hit
multi-month lows. 
    Gold also fell, posting its third straight weekly decline
and debunking the precious metal's reputation as a safe haven
versus other commodities and assets.
    Spot gold XAU= was down 0.3 percent to $1,575.26 an ounce by
3:00 p.m. ET (2000 GMT). U.S. gold futures GCJ3 for April
delivery settled down $5.80 at $1,572.30. 
    
 Prices at 3:14 p.m. EST (2014 GMT)      
                             LAST/      NET    PCT     YTD
                             CLOSE      CHG    CHG     CHG
 US crude                    90.92    -1.14  -1.2%   -1.0%
 Brent crude                110.54    -0.84  -0.8%   -0.5%
 Natural gas                 3.456   -0.030  -0.9%    3.1%
 
 US gold                   1572.30    -5.80  -0.4%   -6.2%
 Gold                      1575.36    -4.16  -0.3%   -5.9%
 US Copper                  348.15    -4.60  -1.3%   -4.7%
 LME Copper                7703.00  -112.00  -1.4%   -2.9%
 Dollar                     82.305    0.356   0.4%    7.2%
                             
 
 US corn                    724.00     4.50   0.6%    3.7%
 US soybeans               1464.50    -9.75  -0.7%    3.2%
 US wheat                   713.25     5.50   0.8%   -8.3%
 
 US Coffee                  143.35     0.15   0.1%   -0.3%
 US Cocoa                  2082.00   -53.00  -2.5%   -6.9%
 US Sugar                    17.91    -0.48  -2.6%   -8.2%
 
 US silver                  28.490    0.058   0.2%   -5.7%
 US platinum               1573.50   -10.00  -0.6%    2.3%
 US palladium               720.40   -14.15  -1.9%    2.4%
A couple walks along the rough surf during sunset at Oahu's North Shore, December 26, 2013. REUTERS/Kevin Lamarque

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