COMMODITIES-Most markets fall, weak US data prompts demand worry

Thu May 16, 2013 3:32pm EDT

* Gold falls for sixth sessions, first time in four years
    * Oil gains as dollar drops after soft U.S. economic
readings
    * U.S. drought shrinks, may be too late for some wheat crops

    By Carole Vaporean
    NEW YORK, May 16 (Reuters) - Most commodity markets slipped
on Thursday, after a slew of U.S. economic readings pointed to
pockets of weakness that investors feared could slow demand, and
gold eased as investors rotated into equity markets, which have
outperformed the precious metal this year.
    Brent crude oil futures rose as the dollar declined, but
gains were stunted as U.S. equity markets stalled near
record-high levels. Investors grew jittery about the economy
when the U.S. Labor Department reported a jump in jobless
claims.
    Global equity markets were mostly flat and the dollar fell
against the euro, after reports on U.S. housing, labor and
regional business conditions pointed to soft spots in the
American economy. 
    Factory activity contracted in the mid-Atlantic region in
May, ground-breaking for new homes tumbled in April, and new
claims for jobless benefits spiked last week, according to three
separate reports. 
    With most of the 19-commodity markets in the Thomson
Reuters-Jefferies CRB index trading lower, the gauge
was off by 0.10 percent, after finishing the two previous
sessions about half a percent lower.
    "The Fed has fallen short of its mandate on jobs and
inflation, so the (economic) data highlights the need for
further accommodation," said Vassili Serebriakov, FX strategist
at BNP Paribas in New York.
    
    GOLD FALLS, OIL GAINS
    Gold fell to a four-week low despite prospects of the
Federal Reserve continuing its easy money policy, a stance that
impelled many investors to buy gold up to its 2011 record highs.
For the first time in more than four years, gold has declined
for six straight sessions.
    Its recent price fall spooked investors in favor of other
asset markets like equities.
    Spot gold prices were down $9.6, or 0.69 percent, at 
 $1,386.60 an ounce. Earlier, it fell as much as 2.5 percent to
$1,390.24, its lowest since April 19. 
    Oil prices rose, but Brent oil futures remained below $104 a
barrel as soft U.S. economic data added to a bearish outlook on
demand. Brent rose 9 cents to $103.77 a barrel, and U.S.
oil gained 53 cents to $94.83 a barrel.
    "What's keeping a cap on (prices) is the fact that the
equity markets stalled out at key levels of 1,665," said Brian
LaRose, technical analyst with United-ICAP in Jersey City.
    Brent crude oil would need to jump above $105.25 per barrel
and U.S. crude oil above $96.65 in order for bullish momentum to
take hold, he said. 
    
    DROUGHT DISAPPEARING
    Elsewhere, U.S. corn futures fell 1 percent on profit-taking
and optimism over seeding progress and prospects for the new
crop, while soybeans rose on tight U.S. supplies, traders said.
    Wheat fell on technical selling and seasonal pressure as the
U.S. harvest approached, with the Chicago Board of Trade July
contract hitting a six-week low.
    Areas of severe drought continue to shrink across many key
agricultural areas of the central United States, though it may
be too late for some wheat farmers who are preparing for
harvest, a new weekly drought report issued by a consortium of
state and federal climate experts said. 

    Farmers in the U.S. Corn Belt have been planting frantically
this week, taking advantage of mostly favorable weather to catch
up after a historically slow start this spring due to weather
delays.
    "Finally we will see some solid progress on corn planting
this week, before it gets wet again over the weekend and pushes
the farmers out of fields," said Joyce Liu, an analyst at
Phillip Futures.
    Rains this weekend and early next week are likely to stall
their progress but also add beneficial soil moisture.
    "Today's planting delays become tomorrow's moisture and will
help the crop get established," said Jim Gerlach, president of
A/C Trading in Fowler, Indiana.           
 Prices at 2:34 p.m. EST (1834 GMT)                         
 
                              LAST      NET    PCT     YTD
                                        CHG    CHG     CHG
 US crude                    95.19     0.89   0.9%    3.7%
 Brent crude                103.93     0.25   0.2%   -6.5%
 Natural gas                 3.938   -0.132  -3.2%   17.5%
 
 US gold                   1386.70    -9.50  -0.7%  -17.3%
 Gold                      1387.89    -4.40  -0.3%  -17.1%
 US Copper                  329.70     3.20   1.0%   -9.7%
 LME Copper                7263.75    65.75   0.9%   -8.4%
 Dollar                     83.600   -0.230  -0.3%    8.9%
                           #VALUE!
 
 US corn                    641.75    -9.00  -1.4%   -8.1%
 US soybeans               1428.50    15.75   1.1%    0.7%
 US wheat                   688.50    -5.25  -0.8%  -11.5%
 
 US Coffee                  140.25    -0.30  -0.2%   -2.5%
 US Cocoa                  2299.00   -45.00  -1.9%    2.8%
 US Sugar                    16.83    -0.12  -0.7%  -13.7%
 
 US silver                  22.695    0.037   0.2%  -24.9%
 US platinum               1484.00    -6.70  -0.5%   -3.6%
 US palladium               740.05    11.00   1.5%    5.2%
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