December 31, 2012 / 9:00 PM / in 5 years

COMMODITIES-Wheat, soy top 2012 gains; coffee, juice lead losses

7 Min Read

* CRB index down for 2nd year as losses overwhelm gains
    * U.S. wheat up 19 pct on year, soybeans rise 18 pct
    * Gold climbs 6 pct, extending bull run to 12th year
    * Oil up for fourth straight year, copper rises too
    * Coffee down nearly 40 pct; orange juice off 30 pct

    By Barani Krishnan
    NEW YORK, Dec 31 (Reuters) - Wheat and soybeans posted the
highest gains and coffee the biggest loss while gold's rally
stretched to a 12th year as commodities ended 2012 focused on
the U.S. fiscal crisis after riding through a blistering drought
and Europe's debt debacle.
    Oil rose for a fourth straight year since the 2008 financial
crisis, setting a record annual average price above $111 a
barrel. But annual gains from oil - and copper - were modest as
a weak global economy weighed on a strong couple of quarters for
the two industrial commodities.
    The Thomson Reuters-Jefferies CRB index, a widely
followed commodities indicator, finished flat on the day but
down for a second year - losing more than 3 percent - despite 13
winners among the 19 mostly U.S.-traded markets on its list.
    Three of the CRB's components posted double-digit gains:
Chicago-traded wheat leading with 19 percent, followed by
soybeans and natural gas. Four markets, all agricultural-based,
had double-digit losses, with New York-traded arabica coffee
falling nearly 40 percent and orange juice just over 30 percent.
    
    FOCUS ON U.S. 'FISCAL CLIFF'
    Analysts and traders said they were optimistic of a surge in
commodity investments in the new year after President Barack
Obama announced on Monday that the White House and its rival
Republicans in Congress were close to a deal on the U.S. "fiscal
cliff". 
    Most commodities staged a last-gasp rally on news of the
potential deal to avert some $600 billion in tax increases and
spending cuts in 2013 that could otherwise send the U.S. economy
into another recession.
    "I think we'll see a rally in copper prices in the first
quarter and I wouldn't be surprised to see new money hitting
commodities early next year as it is still a good investment,"  
  said Randy North, director at RBC Capital Markets.
    Money managers said investors seem willing to take more
risks in 2013 in hopes of greater rewards after spending most of
this year in a defensive crouch. 
    Recent U.S. data showed contracts for U.S. home resales hit
a 2-1/2-year high in November and factory activity in the
Midwest expanded in December, suggesting some strength in the
economy. 
    
   
    
    STRONG OUTLOOK FOR WHEAT, PALLADIUM
    Wheat prices surged after poor crop weather in major
exporters from Russia to Argentina created supply tensions.
Aside from its 19 percent gain in Chicago, wheat was up 27
percent in Paris.
    U.S. wheat ended the day down, near a six-month low at
$7.78 a bushel. French milling wheat settled close to a
five-month bottom at 248 euros ($330) a tonne.
    The outlook for wheat remains strong, with the U.S. crop for
next year's harvest suffering from a lack of moisture and
appearing vulnerable to frost damage this winter. Demand is also
steady after the recent pullback in Chicago prices.
    Soybeans had similar gains to wheat, finishing up
nearly 18 percent for the year, but closing down for the day at
$14.18-3/4 a bushel in Chicago.
    Like wheat, soybean prices were driven by inclement weather
as record heat in the summer led to the worst U.S. drought in
half a century that wiped out a huge swathe of crops.
    U.S. gold futures ended the year up 6 percent at
$1,675.80 an ounce.
    Gold was helped by rock-bottom interest rates in most
leading economies, concerns over the financial stability of the
euro zone, and diversification into bullion by central banks.
    Other precious metals such as palladium, platinum
 and silver outperformed gold, rising between 7
percent and 10 percent.
    Palladium has been on a bullish trend since November, when
refiner Johnson Matthey projected the biggest supply deficit in
11 years in the metal, largely used as an auto catalyst.
Platinum rallied earlier in the year after concerns about worker
strikes in top producer South Africa. 
    Copper prices rose for the day and were up 4 percent
on the year, finishing at $7,970 a tonne in London and $3.6525 a
lb in New York amid confidence in new economic strength for top
metals buyer China.
    
    NATGAS OUTPERFORMS OIL; COFFEE BOTTOM OF HEAP
    In oil, benchmark Brent crude in London finished up
on the day and 3.5 percent higher on the year at $111.11 a
barrel. U.S. crude ended up on the day and 7 percent
higher for the year at $91.82.
    Oil had a good run in the first and third quarters but
slipped toward the year-end on U.S. fiscal worries.
    Natural gas fell for the day but rose 13 percent for
the year, its best since 2007, just before the revolution in
shale gas supply took off. 
    Arabica coffee turned in the worst performance of
2012, falling for the day and losing 37 percent for the year due
to concerns over record global production. 
    U.S. orange juice futures were the second-weakest performer
on the CRB, tumbling for the day and losing 31 percent for the
year, as investors liquidated long positions even as merchants
continued to worry about the impact of greening disease on crops
in citrus-rich Florida. 
    
 Prices at 2:59 p.m. EST (1959 GMT)      
                             LAST/      NET    PCT     YTD
                             CLOSE      CHG    CHG     CHG
 US crude                    91.88     1.08   1.2%   -7.0%
 Brent crude                111.29     0.67   0.6%    3.6%
 Natural gas                 3.351   -0.118  -3.4%   12.1%
 
 US gold                   1675.80    19.90   1.2%    7.0%
 Gold                      1675.76    20.86   1.2%    7.1%
 US Copper                  365.25     6.30   1.8%    6.3%
 LME Copper                7931.00    44.00   0.6%    4.4%
 Dollar                     79.764    0.086   0.1%   -0.5%
 CRB                         0.000    0.000   0.0% -100.0%
 
 US corn                    694.00     5.50   0.8%    7.3%
 US soybeans               1424.00    -4.00  -0.3%   18.8%
 US wheat                   778.75    -1.25  -0.2%   19.3%
 
 US Coffee                  143.80    -3.05  -2.1%  -37.0%
 US Cocoa                  2236.00   -13.00  -0.6%    6.0%
 US Sugar                    19.51     0.09   0.5%  -16.0%
 
 US silver                  30.227    0.252   0.8%    8.3%
 US platinum               1538.70    21.30   1.4%    9.5%
 US palladium               703.35     3.05   0.4%    7.2%

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