COMMODITIES-Oil down on creeping US stockpiles; wheat, corn sink

Wed Mar 6, 2013 4:32pm EST

* US crude stockpiles up 3 mln barrels over market forecast
    * Wheat hits 8-month lows as heavy snows ease crop dryness
    * Base metals copper, zinc slip as dollar rallies vs euro
    * Gold up on South Korean cenbank buying, bargain hunting

    By Barani Krishnan
    NEW YORK, March 6 (Reuters) - Oil prices fell on Wednesday,
a day after posting their biggest gains since December, after
worries about creeping U.S. crude stockpiles, and grains markets
slumped as heavy snows relieved dryness in America's crop belt.
    Prices of base metals such as copper and zinc
 slipped as the dollar hit a one-week high against the
euro. A stronger dollar technically makes commodities priced in
the greenback costlier for holders of other currencies.
    Precious metals bucked the lower trend, with gold and
silver rising on bargain hunting by investors after last
week's losses. Gold particularly rose on news of another bullion
purchase by South Korea's central bank in February, and on hopes
that the outflow from gold-backed exchange-traded funds will end
soon. 
    The Thomson Reuters-Jefferies CRB index, a global
benchmark for commodity prices, settled down 0.6 percent after
falling to its lowest levels since July 12.
    Fifteen of the 19 markets tracked by the CRB ended lower.
Corn and wheat fell the most, by about 3 percent each.
    
    RISING US INVENTORIES PRESSURE OIL
    Oil prices fell more than $1 per barrel after U.S.
government data showed domestic crude inventories rose much more
than forecast.
    U.S. crude stocks rose 3.83 million barrels in the week to
March 1, the Energy Information Administration (EIA) said in its
weekly report. Analysts had forecast a 500,000-barrel build for
last week in the United States, the world's largest oil
consumer. 
    The rise in U.S. crude stockpiles came as refinery
utilization fell during winter plant maintenance season and as
the country's oil imports dropped last week.
    "This is all definitely putting some pressure on (crude oil)
in the short term," said Phil Flynn of Price Futures Group in
Chicago. "The crude market hasn't bottomed yet."
    U.S. crude settled down 39 cents, or 0.4 percent, at
$90.43 per barrel.
    Benchmark Brent crude, traded in London, finished
down 55 cents, or 0.5 percent, at $11.06.
    
    WET WEATHER WEIGHS ON WHEAT, CORN 
    U.S. wheat futures sank to their lowest level in more than
eight months as heavy snows eased dryness in key growing areas
and boosted harvest estimates.
    Optimism soared after a storm dumped 5 to 10 inches of wet
snow on the Midwest on Tuesday, the latest round of
precipitation following the worst U.S. drought in more than 50
years. Additional moisture is expected to provide more relief to
bone-dry soils later this week.
    "Up until a month ago, the ability to produce wheat this
coming spring was in doubt to put it mildly," said Jack
Scoville, vice president of Price Futures Group. "All of a
sudden that situation's changed."
    Chicago-traded wheat for May delivery tumbled 22-1/2
cents, or 3.2 percent, at $6.83-3/4 a bushel.
    The U.S. hard red winter wheat crop, which is used to make
bread, had been stressed by dryness in the Great Plains since it
was planted last fall. However, crop forecaster Lanworth raised
its forecast for U.S. wheat production 6 percent due to
increased precipitation in the southern and central Plains.
 
    Global wheat output also could climb to record highs in the
coming year due to improved crop prospects for key producers
that were hit by severe droughts last year, said Joe Glauber,
chief economist for the U.S. Department of Agriculture.
 
    "This is an encouraging sign to have a couple of major snow
storms, and it looks like slow melting snow, which is another
positive, but we will see," he told Reuters.
    Improving moisture weighed on corn prices ahead of the U.S.
spring planting season.
    Chicago-traded corn for May slid 20-1/2 cents, or 2.9
percent, to $6.88-1/2 a bushel.
    Corn for December, representing the crop to be
harvested in fall, ended down 1.4 percent at $5.44-1/2 after
dropping to a near nine-month low. 
    
 Prices at 4:11 p.m. EST (2111 GMT)      
                             LAST/      NET    PCT     YTD
                             CLOSE      CHG    CHG     CHG
 US crude                    90.43    -0.39  -0.4%   -1.5%
 Brent crude                111.06    -0.55  -0.5%    0.0%
 Natural gas                 3.470   -0.059  -1.7%    3.6%
 
 US gold                   1574.90     0.00   0.0%   -6.0%
 Gold                      1581.96     6.90   0.4%   -5.5%
 US Copper                  347.40    -2.25  -0.6%   -4.9%
 LME Copper                7690.00   -82.00  -1.1%   -3.0%
 Dollar                     82.486    0.399   0.5%    7.4%
                             
 
 US corn                    708.00   -24.00  -3.3%    1.4%
 US soybeans               1484.50   -12.00  -0.8%    4.6%
 US wheat                   676.25   -20.00  -2.9%  -13.1%
 
 US Coffee                  141.25     0.10   0.1%   -1.8%
 US Cocoa                  2042.00   -17.00  -0.8%   -8.7%
 US Sugar                    18.20     0.01   0.1%   -6.7%
 
 US silver                  28.803    0.199   0.7%   -4.7%
 US platinum               1579.80    -5.90  -0.4%    2.7%
 US palladium               740.05     5.45   0.7%    5.2%
A couple walks along the rough surf during sunset at Oahu's North Shore, December 26, 2013. REUTERS/Kevin Lamarque

Find your dream retirement town

Florida? Hawaii? Reuters has teamed up with Zillow to give you the power to customize a list of your best places to retire.  Video | Full Article