* CRB commodities index posts second weekly gain
* Cotton up 23 pct on year, prices at late March 2012 high
* Natgas rises 25 pct from five-week low hit in February
By Barani Krishnan
NEW YORK, March 15 Cotton prices neared a
one-year peak on Friday as merchants and speculators kept
bidding up the fiber a day after data showed a spike in U.S.
weekly exports, and natural gas rallied on cold weather, leading
Oil prices rose as supportive U.S. economic data fueled
prospects of increased demand in the world's top oil consumer,
amid concerns over Middle East supplies.
Copper fell from rising stockpiles of the metal in
top buyer China. Gold inched up as the dollar slid
against other major currencies.
In agricultural markets, raw sugar rose while arabica
coffee dropped to a 33-month low and soybeans fell for a
fourth straight day.
The Thomson Reuters-Jefferies CRB index, a global
benchmark for commodity prices, rose marginally, ending up for a
second week in a row. Gasoline and heating oil
helped the CRB's rise, along with cotton and natural gas.
CHINA FUELS COTTON RALLY
Cotton's continuous front-month contract in New York, May
, settled up 1.64 cents, or 1.8 percent, at 92.50 cents a
lb. It peaked at 93.93 cents during the session, touching a high
from late March 2012.
After sliding for two years, the front-month cotton contract
has jumped 23 percent so far in 2013. Physical buying has
supported the run-up, although short-covering has contributed
too, with merchants becoming buyers as well.
While speculators boosted their net long position in cotton
futures and options to highs not seen since September 2010,
commercial dealers have also boosted their net short position.
The size of the short position has made the market prone to
short-covering rallies as merchants sought to cover their bets.
Another factor for the U.S. cotton rally is China.
While the U.S. Department of Agriculture has forecast a
record global surplus by the end of July, more than half of
those reserves are expected to be held within China's
stockpiles, unavailable to the global marketplace.
China began building its stocks in 2011, paying above global
prices to support farmers. The world's largest cotton consumer
is forecast to have enough fiber in its stocks by the end of
July to meet demand for more than a year.
"Cotton is benefiting from several factors. China cotton
buying is the most direct factor," said John Flanagan, trader at
Flanagan Trading Corp in Fuquay-Varina, North Carolina.
COLD WEATHER DRIVES NATGAS
Natural gas hit a 3-1/2-month high on supportive U.S. weekly
storage data and forecasts for more cold weather in consuming
regions next week.
Above-average nuclear power plant outages also helped keep
momentum to the upside.
In New York, the front-month natural gas contract, April
, settled up 1.6 percent at $3.872 per million British
thermal units. The contract rose to as high as $3.924 mmBtu in
electronic trade, a peak since late November, according to
Traders said the chart picture for gas looked supportive
after the front-month contract broke through several key
resistance levels on its 25 percent run-up from a five-week low
of $3.125 per mmBtu, hit in mid-February.
But some cautioned that the impending end of winter could
provide resistance to higher prices.
"The natural gas market extended recent gains with apparent
ease as the temperature outlook trended cooler again. As we've
been noting, however, the market is in full weather-driven mode
here and is only as strong as the underlying forecast, and will
see a downside test once the weather pattern changes," said Citi
Futures energy specialist Tim Evans.
Prices at 3:12 p.m. EDT (1712 GMT)
LAST/ NET PCT YTD
CLOSE CHG CHG CHG
US crude 93.52 0.49 0.5% 1.9%
Brent crude 110.07 1.11 1.0% -0.9%
Natural gas 3.872 0.060 1.6% 15.5%
US gold 1592.60 1.90 0.1% -5.0%
Gold 1591.70 1.90 0.1% -4.9%
US Copper 350.80 -1.55 -0.4% -4.0%
LME Copper 7752.00 -48.00 -0.6% -2.3%
Dollar 82.231 -0.375 -0.5% 7.1%
US corn 717.00 0.50 0.1% 2.7%
US soybeans 1426.00 -9.50 -0.7% 0.5%
US wheat 723.00 -1.75 -0.2% -7.1%
US Coffee 137.50 -2.15 -1.5% -4.4%
US Cocoa 2115.00 -15.00 -0.7% -5.4%
US Sugar 18.89 0.05 0.3% -3.2%
US silver 28.851 0.044 0.2% -4.6%
US platinum 1592.40 2.60 0.2% 3.5%
US palladium 775.65 4.90 0.6% 10.3%