* Oil erases bulk of early loss, rebounding with US stocks
* Gold up after Fed official says no hurry to ditch stimulus
* Copper slumps on weak China manufacturing activity data
* Soybeans hits 8-month high; coffee, raw sugar up too
By Barani Krishnan
NEW YORK, May 23 Oil tracked a recovery in U.S.
stocks to erase the bulk of its early losses on Thursday but
copper slumped, reversing gains from the previous session, after
data suggesting weak manufacturing activity in top metals buyer
Gold rose as the dollar fell and after comments from a
senior Federal Reserve official that the U.S. central bank was
in no hurry to start winding down its stimulus for the economy
-- which had been a pillar for high gold prices.
On the agricultural end, soybean futures rose for a sixth
straight session, touching an eight-month high, as dwindling
supply from the drought-plagued 2012 harvest sparked commercial
demand. In soft commodities, arabica coffee and raw sugar rose
on light buying after hitting multi-year lows previously.
The Thomson Reuters-Jefferies CRB index, a
bellwether for commodity prices, settled little changed after
slipping to a near week-low on Wednesday. Wheat and arabica
coffee led gains on the 19-commodity CRB, rising about 2
percent. Cocoa and cotton were among the bigger decliners,
losing about 2 percent.
OIL REBOUNDS WITH WALL STREET STOCKS
In oil, benchmark Brent crude rebounded from a three-week
low hit early on Thursday by riding the coattails of a
turnaround in U.S. equities.
Wall Street stocks ended lower but sharply off their session
lows, overcoming worries about weak Chinese manufacturing data
and the prospects of the Federal Reserve reducing its monetary
"Equities are holding in pretty well, and the market's in an
uptrend with equities, but nothing else has fundamentally
changed," said Bill Baruch, senior market strategist at
iitrader.com in Chicago, Illinois.
"There's a large short position in the market and the funds
are covering positions before the holiday weekend," he added,
referring to the forthcoming Memorial Day holiday in the United
Brent crude settled down 16 cents at $102.44 a
barrel, recouping losses of nearly $2 after earlier reaching
$100.64, its lowest price since May 2. Prices are still down
sharply from a 2013 high of $119.17 reached on Feb. 8.
U.S. crude ended nearly flat, down 3 cents to $94.25
and even briefly going positive in post-settlement trading. It
had earlier lost more than $2 in intra-day trading.
GOLD RECOUPS WEDNESDAY LOSS
Gold recouped Wednesday's losses after the president of the
Federal Reserve Bank of St. Louis James Bullard said he did not
think the Fed was "that close" to starting the process of
winding down its stimulus for the U.S. economy.
The spot price of gold was up 1.2 percent at $1,389
an ounce by 2100 GMT. It lost more than 1 percent in the
previous session after Fed Chairman Ben Bernanke said a decision
to reduce the central bank's bond-buying programme could be
taken in the 'next few meetings.'
"The market is still digesting Bernanke's comments, which
took everybody by surprise... but today Bullard went a little
bit in the other direction saying that tightening wouldn't come
that quickly and I think that is lending support," Danske Bank
analyst Christin Tuxen said.
The dollar index fell more than half a percent
against a basket of currencies, mostly due to a rally in the
yen. Currency markets paid little heed to data showing a
larger-than-expected drop last week in the number of Americans
filing new unemployment benefits.
COPPER WOBBLES ON CHINA
Copper prices slid over 3 percent after a preliminary survey
of purchasing managers showed a fall in Chinese factory orders
that added to concerns that a recovery in the world's
second-largest economy was sputtering.
China is the world's biggest consumer of industrial metals,
taking 40 percent of the global supply of refined copper.
Benchmark three-month copper on the London Metal Exchange
closed down $174 at $7,300 a tonne, after hitting a
session low of $7,215.
On Wednesday, LME copper had rallied to a six-week high of
$7,533.75 on continued production outage at Indonesia's Grasberg
copper mine after a tunnel collapse that killed 28 workers at
the world's second-largest copper mine.
But in Thursday's session, copper wobbled after the HSBC
Purchasing Managers' Index for China showed factory activity
shrank for the first time in seven months in May.
"I think that's what's turned sentiment because yesterday
things were looking a lot stronger for copper," Barclays analyst