* Brent crude oil back below 100- and 50-day moving averages
* Wheat hits 2-week high on record low rating for US crop
* Soy, corn also rally; raw sugar, arabica edge higher
* Copper erases early gain; nickel up on Indonesia exports
By Barani Krishnan
NEW YORK, Nov 27 Oil prices fell for a second
straight day on Tuesday as enthusiasm over a new debt deal for
Greece fizzled and U.S. fiscal worries resurfaced, while wheat
hit a two-week high on supply tensions.
News of an agreement between euro zone finance ministers and
the International Monetary Fund to reduce Greece's debt provided
only fleeting relief to commodity markets as skepticism remained
about the broader euro zone economy.
Oil traders eyed the looming U.S. "fiscal cliff" as a sign
of further headwinds for fuel demand. The U.S. Congress showed
some signs of advancing toward a compromise on taxes and
spending, but a firm deal by the end of the year to avoid
appeared miles away.
The dollar, meanwhile, rebounded against the euro
on data showing U.S. consumer confidence at its highest
in more than four years. The U.S. currency's strength
weighed somewhat on demand for dollar-denominated commodities.
The 19-commodity Thomson Reuters-Jefferies CRB index
settled flat, surrendering early gains helped by the
debt deal for Greece.
NICKEL RALLIES, OIL CHOPPY
Nickel, a base metal used for making stainless steel and
other corrosion-resistant alloys, was the biggest gainer on the
CRB, rising nearly 3 percent after news that Indonesia's
nickel ore exports rose in October on buying from China.
Leading industrial metal copper was flat
after initially striking a three-week high on the funding
agreement for Athens.
Oil prices eased in choppy trading due to doubts about the
latest attempt to address Greek debt and uncertainty about U.S.
fiscal negotiations ahead of the year-end deadline.
Greece's international lenders agreed to a package of
measures to reduce Greek debt by 40 billion euros, cutting it to
124 percent of gross domestic product by 2020, but analysts
warned the deal did not spell the end to Europe's problems.
"The euro zone still has growth issues even if we accept the
Greek deal as enough to sustain financial stability and keep
Greece in the European Union," said Tim Evans, an energy analyst
for Citi Futures Perspective.
London's Brent crude settled at $109.87 per barrel,
down 1 percent and back below the 100-day moving average of
$110.61 and the 50-day moving average of $110.55.
U.S. crude fell 0.6 percent, finishing at $87.18 a
WHEAT SURGES ON WEAK CROP RATING
Front-month wheat futures in Chicago settled up 2.8
percent at $8.73 a bushel. The market set a two-week high of
$8.73-1/2 after another record low rating for U.S. wheat crop
The U.S. Department of Agriculture said in a weekly crop
progress report on Monday that the condition of the winter wheat
crop has fallen again, continuing a series of lows struck this
month amid persistent dry weather.
The USDA said the share of the U.S. winter wheat crop rated
good-to-excellent fell to 33 percent due to dry conditions in
the U.S. Plains, as the plants headed into winter dormancy.
While the ratings matching analysts' estimates, they added
to concerns about dwindling global stocks, already stretched
following weather disrupted seasons in the Black Sea region, and
expectations that adverse weather will cut yields and quality in
harvests in Argentina and Australia.
"The U.S. hard red crop is looking really poor," said Andrew
Woodhouse, grains analyst at Advance Trading Australasia.
"The European market is running out of stock, the Black Sea
is running out of stock and now, with the U.S. production
profile going down, it is very supportive for wheat."
Corn and soybean futures also traded at their
highest in about two weeks. Soy rose for the third straight
session and corn for the second consecutive day, bolstered by
month-end investment fund buying, analysts said.
Other crops that gained included soft commodities such as
sugar and coffee.
Raw sugar futures edged higher in New York trading,
consolidating below the 20-cent-per-lb level, as the market
digested updates from Brazil where a strong tail end to the crop
is capping the potential for price gains.
Arabica coffee futures were also firm in New York
trade, consolidating above Monday's 2-1/2 year low, as ample