COMMODITIES-Natgas tops gains in 2013, gold in biggest loss since 1981

Tue Dec 31, 2013 3:41pm EST

Related Topics

* Natural gas up 30 percent in 2013, U.S. oil gains 8
percent
    * Corn worst performer with 40 percent slump
    * Gold on track for 28 percent loss this year

 (Updates with closing prices)
    By Eric Onstad
    LONDON, Dec 31 (Reuters) - Natural gas was the
best-performing commodity in 2013 while U.S. oil also gained,
but gold notched up its biggest fall since 1981 as commodities
ended the year amid uncertainty about the scope for rising
global demand to absorb ample supplies.
    Corn fell the most in 2013 with losses of nearly 40 percent
as record U.S. production boosted global supplies, while major
consumer China is cutting back on expected imports.
    For 2014, commodities investors are focusing on an improved
economic outlook in top consumers the United States and China,
although increased supply may spoil the party, particularly for
oil and copper.
    "This optimism that we are living through will help support
commodity markets in the first and second quarters," said
Jonathan Barratt, chief executive of commodity research firm
Barratt's Bulletin in Sydney.
    "It should provide an undercurrent of strength."
    Ample supplies of many commodities may outweigh any stronger
demand, leading to another lacklustre year for broad commodity
indices.
    "Commodity prices are probably going to be flattish coming
into the new year," said Colin Hamilton, head of commodities
research at Macquarie in London.
    The Thomson Reuters/Core Commodity CRB index,
which tracks 19 commodities, closed the session down 0.85
percent, its worst daily performance in two months.
    It fell 4.8 percent in 2013, the third straight year of
losses.
        
   
    
    NATURAL GAS JUMPS
    U.S. natural gas futures climbed steeply amid fresh signs of
chilly winter weather and stronger-than-usual seasonal demand.
The front-month contract ended the year up 27 percent.
    If drawdowns for the rest of the heating season match the
five-year average, it would result in the lowest end-winter
inventory since 2008. That could help prop up prices next year
as utilities scramble to rebuild stocks.
    U.S. oil prices closed the year 7.2 percent firmer as
traders headed into 2014 eyeing improving demand, the end of the
Federal Reserve's monetary stimulus and the dramatic overhaul of
the world's largest oil market caused by the shale revolution.
    The market recouped a 7 percent decline in 2012, but could
come under pressure as the U.S. shale boom adds to supply in the
world's largest oil consumer.
    Brent crude ended the year almost flat at $110.80 a
barrel, with supply disruptions having offset concerns over weak
demand. 
    "As we move into 2014, markets are once again trying to
balance various supply disruptions with some positive news," a
JBC Energy report said.
    
    GOLD PLUNGES
    Gold lost 28 percent in 2013 for its biggest annual
decline since 1981 as investors ploughed money into equities,
where the Dow Jones industrial average has jumped 26
percent and Japan's Nikkei nearly 60 percent. 
    Holdings in SPDR Gold Trust, the world's largest gold-backed
exchange-traded fund, fell 40 percent in 2013 to
their lowest since 2009 as investors lost faith in bullion as an
inflation hedge, anticipating the Federal Reserve's move to trim
its commodity-friendly bond purchases.
    "As soon as short-term interest rates start rising, then you
can't afford to invest in something that doesn't pay yield, like
gold - it's going to be equities," Standard Bank analyst Walter
de Wet said.
    Among industrial metals, zinc was this year's best performer
with a largely flat outcome, as investors bet mine closures
would transform an oversupplied market into one facing a
deficit. 
    Zinc is tipped by many analysts for gains next year after
other base metals scored losses in 2013 as uncertain demand in a
recovering global economy combined with largely ample supply.
    Nickel and aluminium, with the heaviest surpluses, were set
to be the worst performers, down 18 percent and 12 percent
respectively.
    Copper on the London Metal Exchange, with perhaps the widest
investor focus, slipped 7 percent in 2013, but the losses were
more modest than many expected as an anticipated surge in new
mine production faced processing backlogs, creating delays for
refined product.
    
    BUMPER CORN CROPS 
    In agricultural markets, U.S. corn futures fell nearly
40 percent, the biggest annual slide on record, following a
bumper global crop and a rebound in U.S. production. 
    Adding to those woes, China has rejected more than half a
million tonnes of U.S. corn, citing unapproved genetically
modified strains, and imposed strict checks as Beijing seeks to
curb cheap imports and support domestic prices. 
    Cocoa markets were on track for annual gains of more than 20
percent as speculators have piled in due to forecasts of a
global deficit and strong demand for cocoa butter. 
    Coffee and sugar, however, notched up heavy losses,
pressured by abundant global supplies.
    
    
Prices at 3:27 p.m. EDT (2027 GMT)      
                             LAST/      NET    PCT     YTD
                             CLOSE      CHG    CHG     CHG
US crude              98.70    -0.59  -0.6%    7.5%
Brent crude         110.90    -0.31  -0.3%   -0.2%
Natural gas           4.230   -0.197  -4.4%   26.2%
                                                          
US gold             1202.30    -1.50  -0.1%  -28.3%
Gold                1201.89     5.89   0.5%  -28.2%
US Copper              3.40     0.01   0.4%   -7.0%
LME Copper         7360.00   -15.00  -0.2%   -7.2%
Dollar               80.161    0.161   0.2%    4.4%
CRB              280.172   -2.395  -0.9%   -5.0%
                                                          
US corn               422.00    -1.50  -0.4%  -39.6%
US soybeans          1312.50   -15.75  -1.2%   -7.5%
US wheat              605.25     4.75   0.8%  -22.2%
                                                          
US Coffee            110.70    -4.00  -3.5%  -23.0%
US Cocoa            2709.00    -3.00  -0.1%   21.2%
US Sugar              16.41     0.03   0.2%  -15.9%
                                                          
US silver            19.370   19.174   1.6%  -35.9%
US platinum         1371.10     7.10   0.0%  -10.9%
US palladium         718.30     7.50   1.1%    2.1%


 (Additional reporting by Clara Denina, Joshua Franklin and
David Brough in London and Josephine Mason in New York; Editing
by Dale Hudson, Richard Pullin and James Dalgleish)
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