January 18, 2013 / 10:46 PM / 5 years ago

COMMODITIES-Biggest wheat week in 6 months; arabica surges too

* Wheat up 5 pct for the week, biggest weekly rise since
July
    * Arabica coffee at 2-month highs as grower selling slows

    By Barani Krishnan
    NEW YORK, Jan 18 (Reuters) - Wheat posted its biggest weekly
gain in six months as it rallied Friday on concerns of dry
weather in the U.S. wheat belt while arabica coffee surged to a
2-month high as growers became more restrained in selling.
    Oil prices recovered from an early dip also to finish the
week up after news that the U.S. House of Representatives will
consider a bill to raise the debt ceiling enough to allow the
country to pay its bills for another three months. 
    But gains in oil were capped by a surprise drop in U.S.
consumer sentiment to the lowest level in more than a year, with
many consumers citing fallout from the ongoing fiscal wrangling
in Washington.
    Copper ended up too for both the day and week,
bolstered by better-than-expected fourth quarter growth in top
consumer China's economy. 
    The Thomson Reuters-Jefferies CRB index settled up
for the day and for a second week in a row, after 11 of the 19
markets on the commodities bellwether ended in positive
territory.
    Natural gas led the CRB's gains, rising more than 2
percent on forecasts for cold weather over the 10 days that
should boost U.S. heating demand. 
    
    WHEAT ENTICES NEW BUYING
    Wheat knocked out its high from earlier this week late in
Friday's session, enticing a new rebound of buying. 
    Chicago-traded wheat for March delivery ended up 10
cents, or 1.3 percent, at $7.91-1/4 per bushel, just off the
session high of $7.93-3/4 and good for the highest settlement
since Dec. 26. The contract gained 5 percent for the week in the
second straight weekly gain.
    Dry conditions are forecast through the end of the month in
the Plains states that grow most of the wheat in the country,
John Dee, meteorologist for Global Weather Monitoring, said on
Friday. 
    "The hard red winter wheat belt in the Plains looks quiet
and dry but cooler next week, but there shouldn't be a cold air
threat in the Plains," Dee said. 
    
    COFFEE UP ON SHORT COVERING, LEAF RUST
    Coffee futures trading in New York and London extended their
gains on short-covering and reports of coffee leaf rust in
Central America. 
    New York's arabica for March settled up 0.80 cent, or
0.5 percent, at $1.5630 per lb. The contract ended the week up
1.9 percent. Arabica is mostly produced in Brazil and elsewhere
in central and south America.
    Rabobank said in a research note that "disciplined" grower
selling, coupled with concerns about 2013/14 Central American
output, are forecast "to reduce speculators' shorts and drive
prices higher in the first quarter of 2013." 
    London's robusta for March turned lower, finishing
down $2 at $1,976 a tonne, after hitting a two-month high at
$1,989. Robusta is largely grown in Vietnam.
    "We're seeing coverage in both markets to alleviate the
heavy sales we've been getting from Vietnam," said Sterling
Smith, futures specialist for Citigroup in Chicago. 
    "There's a very large short position that needs to work
itself off here." 
    
    OIL UP AS HEDGE FUNDS BUILD POSITIONS
    Brent crude oil closed at $111.89 a barrel, up 0.7
percent for the session and 1.1 percent for the week.
    U.S. crude settled at $95.56, up 0.1 percent higher for the
session and up 2 percent for the week.
    Hedge funds and other large speculators have increased their
positions in U.S. crude oil by almost 50 percent in New York and
London since early November, data from the U.S. Commodity
Futures Trading Commission showed on Friday. Prices have risen
by around $10 a barrel over the same period. 
    
 Prices at 5:23 p.m. EST (2223 GMT)      
                             LAST/      NET    PCT     YTD
                             CLOSE      CHG    CHG     CHG
 US crude                    95.25    -0.24  -0.3%    3.7%
 Brent crude                111.66     0.56   0.5%    0.5%
 Natural gas                 3.566    0.072   2.1%    6.4%
 
 US gold                   1687.00    -3.80  -0.2%    0.7%
 Gold                      1684.40     1.06   0.1%    0.6%
 US Copper                  367.90     1.70   0.5%    0.7%
 LME Copper                8061.00     7.00   0.1%    1.6%
 Dollar                     80.034    0.385   0.5%    4.3%
                              
 
 US corn                    727.50     3.00   0.4%    4.2%
 US soybeans               1429.25    -1.00  -0.1%    0.7%
 US wheat                   791.25    10.00   1.3%    1.7%
 
 US Coffee                  156.30     0.80   0.5%    8.7%
 US Cocoa                  2285.00   -15.00  -0.7%    2.2%
 US Sugar                    18.37    -0.05  -0.3%   -5.8%
 
 US silver                  31.932    0.122   0.4%    5.6%
 US platinum               1672.10   -25.70  -1.5%    8.7%
 US palladium               722.75    -3.40  -0.5%    2.8%

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