March 28, 2013 / 6:50 PM / in 5 years

COMMODITIES-Natgas, cotton lead 1st qtr gains; grains tumble

* Natgas jumps 20 pct in first quarter, cotton 18 pct
    * Wheat leads losses, falling 12 pct

 (Updates with settlement prices throughout, adds price table)
    By Barani Krishnan
    NEW YORK, March 28 (Reuters) - Natural gas and cotton prices
fell on Thursday but posted quarterly double-digit percentage
gains to lead commodities higher in the first three moths, as
U.S. markets wrapped up trading for March ahead of the Good
Friday holiday.
    Gas prices jumped 20 percent on the quarter as persistent
cold weather across key gas-consuming regions in the United
States surprised traders who expected warmer weather with the
onset of spring. 
    Cotton rallied 18 percent as bullish speculative bets on the
fiber hit five-year highs on fear that China's cotton supplies
were tightening, despite a record global surplus expected by end
of July. 
    Grains futures tumbled on Thursday as the U.S. Department of
Agriculture reported large stockpiles and big crops for
everything from corn to soybeans. Agricultural markets were
among the biggest decliners for the quarter, with wheat posting
the biggest quarterly fall, nearly 12 percent. 
    Soft commodities, or coffee, sugar and cocoa, were down
across the board. Sugar had the biggest decline, down more than
9 percent for the quarter, pressured by the impending arrival of
a new Brazilian cane crop. 
    Copper was down about 5 percent on the quarter as
fears of another flare up in Europe's debt crisis from Cyprus'
banking woes offset positive sentiment lent by recent bullish
U.S. economic data. Gold was also down about 5 percent
for the quarter.  
    Crude oil prices were mixed, with U.S. crude posting
a quarterly gain of nearly 6 percent and Brent down
nearly 1 percent. 
    The Thomson Reuters-Jefferies CRB index, a
bellwether for commodities, was down more than half a percent
for Thursday after the tumble in grains prices. But the
19-commodity index rose nearly half a percent for the quarter
and almost 1 percent for March, supported by the gains in U.S.
crude, cotton and natural gas.
    For the second quarter, traders expected pressure on prices
of industrial commodities, particularly metals, if the dollar
strengthens on financial troubles in Europe. The dollar is
already at a four-month peak to the euro, making commodities
priced in the currency less attractive to euro holders. 
    "For base metals, Europe is still directly or indirectly a
big driver because if it isn't the direct driver it's indirect
because of what its done to the euro," BNP Paribas analyst
Stephen Briggs said. 
    "It's not just Cyprus, it's Italy and the continued deadlock
about forming a government, and generally speaking pretty poor
data out of Europe. So I think that's still the main story."
    Cotton marked its second quarterly gain in row as the net 
speculative length in the market -- which indicates bets for
higher prices -- hit peaks last seen in 2008.
    Cotton's price has surged even though a record global cotton
surplus is expected by the end of the crop year through July.
Speculative buying in cotton soared after China, the top
consumer, ramped up domestic stockpiling of the fiber, creating
a tale of two perceived supplies -- one of global stocks and
another of world inventories excluding China's.
    Cotton's front-month contract settled at 88.46 cents
a lb, showing a slight loss on the day. It was up 5.8 percent
for the month and up 17.7 percent for the quarter.
    For natural gas, it was the fourth straight quarterly gain
since March 2012 as surprising turns in U.S. weather patterns
drove physical demand for the commodity and frenzied buying in
the futures market.
    The U.S. Energy Information Administration issued a report
on Thursday showing total domestic gas inventories fell last
week by 95 billion cubic feet to 1.781 trillion. 
    Natural gas' front-month contract closed at 4.024 per
million British thermal units, down 1.1 percent on the day but
up 15.1 percent for March and 20.1 percent for the quarter.
 Prices at 4:00 p.m. EDT (2000 GMT)      
                             LAST/      NET    PCT     YTD
                             CLOSE      CHG    CHG     CHG
 US crude                    97.09     0.51   0.5%    5.7%
 Brent crude                109.90     0.21   0.2%   -1.1%
 Natural gas                 4.024   -0.044  -1.1%   20.1%
 US gold                   1594.80   -11.40  -0.7%   -4.8%
 Gold                      1595.94    -8.85  -0.5%   -4.7%
 US Copper                  343.25     0.00   0.0%   -6.0%
 LME Copper                7540.00   -66.00  -0.9%   -4.9%
 Dollar                     82.973   -0.248  -0.3%    8.1%
 US corn                    695.25   -40.00  -5.4%   -0.4%
 US soybeans               1404.75   -49.00  -3.4%   -1.0%
 US wheat                   687.75   -49.00  -6.7%  -11.6%
 US Coffee                  137.15     0.55   0.4%   -4.6%
 US Cocoa                  2170.00    20.00   0.9%   -3.0%
 US Sugar                    17.66    -0.19  -1.1%   -9.5%
 US silver                  28.323   -0.289  -1.0%   -6.3%
 US platinum               1571.20    -8.60  -0.5%    2.1%
 US palladium               768.25    -0.05   0.0%    9.2%
 (Editing by Bob Burgdorfer and David Gregorio)
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