* Stalemate over U.S. budget drags weigh on markets
* Copper hits 1-week high on bullish China data
* Raw sugar at 3-wk peak as dealers sell short positions
By Barani Krishnan
NEW YORK, Dec 27 Copper hit one-week highs on
Thursday on encouraging data from top metals buyer China and
sugar rallied too, but most other commodities saw little change
they reopened from the Christmas break to news that U.S. budget
talks were still in a stalemate.
Oil closed slightly lower in choppy trading as U.S.
politicians assured they were working to resolve the so-called
U.S. "fiscal cliff", although there was no certainty of a deal
before the year-end to avert punitive tax hikes and spending
cuts for most Americans in 2013.
Gold prices rose for a fourth straight day for their longest
winning stretch in nearly two months, but the gains were small
for a market seen as a key hedge to the U.S. fiscal crisis,
Agricultural markets such as wheat, corn and soybeans also
saw slight price moves, bogged down by U.S. budget worries.
Raw sugar was one of the few outperformers, rising more than
2 percent to a 3-week high, as funds sold their short positions
for profit, pushing the market higher. Cocoa fell more than 1
percent, touching multi-month lows on technical selling.
TRADING CRIMPED BY FISCAL CRISIS, HOLIDAY SEASON
Trading across commodities remained tepid as the Christmas
break ended for the U.S. and U.K. markets and the remaining
holiday stretch toward the New Year began.
Volume in U.S. crude oil was 40 percent lower than the
30-day average, with traders blaming the inaction over the U.S.
fiscal crisis as much a reason as the holiday season.
"We continue to find it difficult to have a directional
position in a low-volume environment in front of the fiscal
cliff uncertainty," said Olivier Jacob, an energy market
consultant at Petromatrix in Zug, Switzerland.
The United States faces $109 billion in across-the-board
spending cuts starting in January unless a deal is reached to
either replace or delay them. Democrats, led by President Barack
Obama, want to switch the spending cuts to tax increases for the
most part -- a plan opposed by Republicans led by John Boehner,
Speaker of the U.S. House of Representatives.
The U.S. Congress will hold a work session on Sunday
beginning at 6:30 p.m. EST (2330 GMT), a day before the Dec. 31
deadline for the fiscal cliff, to try and reach a deal.
London's Brent crude oil fell 27 cents to close at
$110.80 a barrel. U.S. crude dipped 11 cents to settle at
COPPER SURGES ON CHINA INDUSTRIAL PROFITS
Copper jumped to its highest price since Dec. 19 after data
from Beijing showed that profits earned by China's industrial
companies rose 22.8 percent in November from a year ago,
accelerating from October's 20.5 percent hike.
China accounts for about 40 percent of the global copper
"It's not only this one data point; we have seen a series of
data releases lately that were quite encouraging. Everything
points to the fact that the Chinese economy has probably hit the
bottom and is now on the way to a very moderate acceleration. At
least it's getting better, and this is good for cyclical markets
like metals," said Credit Suisse analyst Tobias Merath.
Benchmark copper on the London Metal Exchange closed
at $7,915 a tonne, up more than 1 percent from its $7,801
official price in the final ring trade of a holiday-shortened
session on Monday.
Sugar reached a peak not seen in New York trading since Dec.
6 as dealers sold short positions for profit, sending prices
higher. March raw sugar on ICE Futures U.S. settled up
0.40 cent, or 2.1 percent, at 19.45 cents a lb, after a hitting
3-week high at 19.55 cents.
Prices at 5:05 p.m. EST (2205 GMT)
LAST/ NET PCT YTD
CLOSE CHG CHG CHG
US crude 90.75 2.14 2.4% -8.2%
Brent crude 110.81 2.01 1.9% 3.2%
Natural gas 3.354 -0.038 -1.1% 12.2%
US gold 1663.70 3.00 0.2% 6.2%
Gold 1663.54 0.25 0.0% 6.4%
US Copper 360.10 0.35 0.1% 4.8%
LME Copper 7915.00 105.00 1.3% 4.1%
Dollar 79.638 0.017 0.0% -0.7%
US corn 691.50 -1.75 -0.3% 7.0%
US soybeans 1418.75 -5.75 -0.4% 18.4%
US wheat 772.25 -2.25 -0.3% 18.3%
US Coffee 147.90 -0.40 -0.3% -35.2%
US Cocoa 2255.00 -8.00 -0.4% 6.9%
US Sugar 19.45 0.40 2.1% -16.3%
US silver 30.240 0.205 0.7% 8.3%
US platinum 1531.80 -3.10 -0.2% 9.0%
US palladium 708.50 16.10 2.3% 8.0%