COMMODITIES-Dollar rally hurts gold, oil; USDA batters grains

Fri May 10, 2013 4:45pm EDT

Related Topics

* Dollar rally versus yen weighs heavily on most commodities
    * Gold at 2-week low, oil down 2 pct before recovering at
close
    * Copper rises, bucking trend, as metal stockpiles drop
    * Grains tumble after USDA crop data tops market forecasts

 (Updates with closing prices and oil's recovery from earlier
lows)
    By Barani Krishnan
    NEW YORK, May 10 (Reuters) - A resurgent dollar weighed
heavily on commodities on Friday, driving gold to a two-week low
and oil prices down, while data indicating plentiful U.S. crop
supplies took a further toll on grains futures.
    Copper bucked the trend, closing up for the day and
a third straight week, as stockpiles of the metal fell in
warehouses monitored by trading exchanges in London and
Shanghai. 
    The 19-commodity Thomson Reuters-Jefferies CRB index
 fell about 1 percent for the session. Several markets
tracked by the commodities bellwether closed down about 2
percent or more, including gold, wheat, corn, coffee,
cocoa and cotton. 
    Traders blamed the U.S. dollar for most of the declines.
    A strong dollar makes dollar-denominated commodities, such
as oil and copper, pricier when purchased with other currencies,
weighing on their demand outside of the United States.
    The dollar rallied to a 4-1/2 year high against the yen on
Friday on data showing Japanese investors buying more foreign
assets. Further dollar-yen appreciation was likely as Japan's
aggressive monetary easing takes effect, currency traders said.
The euro also fell against the dollar. 
    "It's all about the dollar strength. That's where all the
fast money is going," said Miguel Perez-Santalla, vice president
of BullionVault, an online physical gold and silver market.
    Gold fell 2.5 percent to a two-week low as a breach of key
chart levels prompted heavy selling in the precious metal. 
    Traders said sell stops - automatic sale orders placed by
traders at pre-set levels to limit losses - were triggered as
gold broke support at $1,445 and $1,440 an ounce, prompting a
sharp move down to a session bottom of $1,420.60.
    Some were wary of the market again snapping the $1,400
support level it broke three weeks ago.
    "A break below that level could see the market going very
messy," said Afshin Nabavi, head of trading at London's MKS. 
    Gold plunged to a more-than-two-year low of $1,321.25 an
ounce on April 16, after stop-sell orders below $1,525 triggered
heavy liquidation. 
    Oil initially fell more than 2 percent but recovered most of
those losses by the close.
    U.S. crude oil settled down 0.4 percent, or 35 cents,
at $96.04 a barrel. It had fallen earlier to a session low of
$93.37.
    Brent crude out of Europe's North Sea, the more
important benchmark for oil, finished down 0.5 percent, or 56
cents, at $103.91. The session low was $101.56. 
    The strong dollar aside, oil was weakened by worries about
creeping stockpiles of crude in the United States, the world's
largest oil consumer. Government data showed U.S. crude
inventories at record highs last week due to growing domestic
production. 
    Corn and wheat tumbled in Chicago trading after the U.S.
Department of Agriculture said it expected the domestic corn
crop to deliver a record 14.14 billion bushels despite lower
yields from a late start to the planting season. 
    U.S. corn ending stocks for 2013/14 would hit 2.004 billion
bushels, nearly triple the 759 million forecast for the Aug. 31
end of this marketing year and marginally above trade estimates,
the USDA said.
    Corn for July delivery on the Chicago Board of Trade
settled down almost 2 percent at $6.36-1/4 a bushel.
    July wheat finished nearly 3 percent lower at
$7.04-1/4 a bushel. 
    
 Prices at 4:13 p.m. EDT (2013 GMT)      
                             LAST/      NET    PCT     YTD
                             CLOSE      CHG    CHG     CHG
 US crude                    95.90    -0.49  -0.5%    4.4%
 Brent crude                103.76    -0.71  -0.7%   -6.6%
 Natural gas                 3.910   -0.073  -1.8%   16.7%
 
 US gold                   1436.60   -32.00  -2.2%  -14.3%
 Gold                      1446.60   -11.10  -0.8%  -13.6%
 US Copper                  335.30     1.25   0.4%   -8.2%
 LME Copper                7375.00    21.00   0.3%   -7.0%
 Dollar                     83.136    0.343   0.4%    8.3%
                             
 
 US corn                    687.75    -6.75  -1.0%   -1.5%
 US soybeans               1488.25    -3.00  -0.2%    4.9%
 US wheat                   696.75   -19.50  -2.7%  -10.4%
 
 US Coffee                  144.45    -3.45  -2.3%    0.5%
 US Cocoa                  2300.00   -49.00  -2.1%    2.9%
 US Sugar                    17.43    -0.04  -0.2%  -10.7%
 
 US silver                  23.658   -0.253  -1.1%  -21.7%
 US platinum               1486.00   -30.50  -2.0%   -3.4%
 US palladium               705.70    -9.05  -1.3%    0.3%
    
    

 (editing by Jim Marshall)
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