COMMODITIES-Up for 2nd week; cotton near year-high, natgas jumps

Fri Mar 15, 2013 4:03pm EDT

* CRB commodities index posts second weekly gain
    * Cotton up 23 pct on year, prices at late March 2012 high
    * Natgas rises 25 pct from five-week low hit in February

    By Barani Krishnan
    NEW YORK, March 15 (Reuters) - Cotton prices neared a
one-year peak on Friday as merchants and speculators kept
bidding up the fiber a day after data showed a spike in U.S.
weekly exports, and natural gas rallied on cold weather, leading
commodities higher.
    Oil prices rose as supportive U.S. economic data fueled
prospects of increased demand in the world's top oil consumer,
amid concerns over Middle East supplies.
    Copper fell from rising stockpiles of the metal in
top buyer China. Gold  inched up as the dollar slid
against other major currencies.  
    In agricultural markets, raw sugar rose while arabica
coffee dropped to a 33-month low and soybeans fell for a
fourth straight day.  
    The Thomson Reuters-Jefferies CRB index, a global
benchmark for commodity prices, rose marginally, ending up for a
second week in a row. Gasoline and heating oil 
helped the CRB's rise, along with cotton and natural gas. 
    
    CHINA FUELS COTTON RALLY
    Cotton's continuous front-month contract in New York, May
, settled up 1.64 cents, or 1.8 percent, at 92.50 cents a
lb. It peaked at 93.93 cents during the session, touching a high
from late March 2012.
    After sliding for two years, the front-month cotton contract
has jumped 23 percent so far in 2013. Physical buying has
supported the run-up, although short-covering has contributed
too, with merchants becoming buyers as well. 
    While speculators boosted their net long position in cotton
futures and options to highs not seen since September 2010,
commercial dealers have also boosted their net short position.
The size of the short position has made the market prone to
short-covering rallies as merchants sought to cover their bets.
    Another factor for the U.S. cotton rally is China.
    While the U.S. Department of Agriculture has forecast a
record global surplus by the end of July, more than half of
those reserves are expected to be held within China's
stockpiles, unavailable to the global marketplace.  
    China began building its stocks in 2011, paying above global
prices to support farmers. The world's largest cotton consumer
is forecast to have enough fiber in its stocks by the end of
July to meet demand for more than a year.
    "Cotton is benefiting from several factors. China cotton
buying is the most direct factor," said John Flanagan, trader at
Flanagan Trading Corp in Fuquay-Varina, North Carolina.
    
    COLD WEATHER DRIVES NATGAS
    Natural gas hit a 3-1/2-month high on supportive U.S. weekly
storage data and forecasts for more cold weather in consuming
regions next week. 
    Above-average nuclear power plant outages also helped keep
momentum to the upside.
    In New York, the front-month natural gas contract, April
, settled up 1.6 percent at $3.872 per million British
thermal units. The contract rose to as high as $3.924 mmBtu in
electronic trade, a peak since late November, according to
Reuters data. 
    Traders said the chart picture for gas looked supportive
after the front-month contract broke through several key
resistance levels on its 25 percent run-up from a five-week low
of $3.125 per mmBtu, hit in mid-February. 
    But some cautioned that the impending end of winter could
provide resistance to higher prices. 
    "The natural gas market extended recent gains with apparent
ease as the temperature outlook trended cooler again. As we've
been noting, however, the market is in full weather-driven mode
here and is only as strong as the underlying forecast, and will
see a downside test once the weather pattern changes," said Citi
Futures energy specialist Tim Evans.
    
 Prices at 3:12 p.m. EDT (1712 GMT)      
                             LAST/      NET    PCT     YTD
                             CLOSE      CHG    CHG     CHG
 US crude                    93.52     0.49   0.5%    1.9%
 Brent crude                110.07     1.11   1.0%   -0.9%
 Natural gas                 3.872    0.060   1.6%   15.5%
 
 US gold                   1592.60     1.90   0.1%   -5.0%
 Gold                      1591.70     1.90   0.1%   -4.9%
 US Copper                  350.80    -1.55  -0.4%   -4.0%
 LME Copper                7752.00   -48.00  -0.6%   -2.3%
 Dollar                     82.231   -0.375  -0.5%    7.1%
                              
 
 US corn                    717.00     0.50   0.1%    2.7%
 US soybeans               1426.00    -9.50  -0.7%    0.5%
 US wheat                   723.00    -1.75  -0.2%   -7.1%
 
 US Coffee                  137.50    -2.15  -1.5%   -4.4%
 US Cocoa                  2115.00   -15.00  -0.7%   -5.4%
 US Sugar                    18.89     0.05   0.3%   -3.2%
 
 US silver                  28.851    0.044   0.2%   -4.6%
 US platinum               1592.40     2.60   0.2%    3.5%
 US palladium               775.65     4.90   0.6%   10.3%
A couple walks along the rough surf during sunset at Oahu's North Shore, December 26, 2013. REUTERS/Kevin Lamarque

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