COMMODITIES-Arabica jumps on dry Brazil, US forecasts hit natgas

Mon Feb 3, 2014 1:39pm EST

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By Barani Krishnan
    NEW YORK, Feb 3 (Reuters) - Arabica coffee hit 8-1/2 month
highs on Monday on worries about unseasonably dry weather in top
producer Brazil, and U.S. natural gas prices fell for a third
day on forecasts that warmer weather is in store for freezing
parts of the country.
    In oil, London's Brent crude slipped to a two-week low on
weak factory data out of China, before violence in Iraq and
Syria helped the market recover.
    Copper hit a two-month bottom on the China factory data.
Gold rose nearly 2 percent after a weak U.S. manufacturing
report weighed on the dollar and global equities, boosting the
precious metal's safe-haven value amid persistent concerns about
emerging markets.
    Among other commodities, soybeans fell for the first time in
three sessions as expectations of bumper harvests in South
America curbed support for tighter U.S. supplies.
    The Thomson Reuters/Core Commodity Index, a global
commodities bellwether, rose 0.3 percent, lifted by gains in 10
of its 19 components.
    Arabica was the CRB's biggest gainer. The market's
spot-month contract, March, rose 7 percent in New York
trade to reach $1.3525 a lb, its highest level since mid-May.
    Until lately, arabica had been in a bear market for almost
three years as consecutive bumper crops from Brazil led to huge
buildup of coffee supplies.
    But the dry Brazilian weather now has signaled the trend
could change, as forecasters predicted arid conditions that
could at least until the middle of February, after record heat
levels for January. 
    "Because of these dry weather forecasts the market has built
up momentum, so we've got a combination of technical and
fundamental support," said Andrea Thompson, analyst with
CoffeeNetwork, part of INTL FC Stone.
    "We are in the critical development stage for the crop."
    U.S. natural gas futures neared a one-week low after
forecasts for warmer weather in the United States.
    Natural gas has been one this year's hottest commodities,
rising 17 percent in January after a 26 percent gain in 2013, as
brutally cold weather continued to envelope the United States.
    But the market has also been volatile, losing more than 5
percent a day at times on concerns that demand for the heating
fuel could suddenly drop.
    Private forecaster MDA Weather Services has predicted
colder-than-average temperatures to remain in much of the United
States before warmer conditions take over in the 11- to 15-day
range, primarily in the southern U.S.
    In Monday's session, the benchmark front-month natural gas
contract on the New York Mercantile Exchange, March, was
down 1.3 cent, or 0.3 percent, at $4.929 per million British
thermal units. It had hit a session low of $4.751 earlier.
    The February contract expired as the market's benchmark last
week, moving March, generally a warmer month, into the
front-month and contributing to the fall in price.
    Prices at 1:22 p.m. EDT (1821 GMT)                          
                     
                              LAST      NET    PCT
                                        CHG    CHG
US crude              96.54    -0.95  -1.0%
Brent crude         106.19    -0.22  -0.2%
Natural gas           4.946    0.003   0.1%
                                                          
US gold             1260.20    20.40   1.7%
Gold                1260.16    16.97   1.4%
US Copper              3.18    -0.01  -0.4%
LME Copper         7022.25   -42.75  -0.6%
Dollar               81.081   -0.230  -0.3%
CRB              283.842    0.530   0.2%
                                                          
US corn               436.50     2.50   0.6%
US soybeans          1296.50    13.75   1.1%
US wheat              561.50     5.75   1.0%
                                                          
US Coffee            134.75     9.55   7.6%
US Cocoa            2920.00     9.00   0.3%
US Sugar              15.75     0.20   1.3%
                                                          
US silver            19.430    0.003   1.6%
US platinum         1387.60    11.90   0.9%
US palladium         702.75    -0.45  -0.1%

 (Editing by David Gregorio)
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