April 10, 2013 / 7:26 PM / 5 years ago

COMMODITIES-Natgas, cotton help overcome other markets' weakness

* Gas rallies by over 3 pct, cotton rises about 2 percent
    * Dollar at 4-year peak to yen, pressuring oil, copper, gold

 (Updates with markets' close)
    By Barani Krishnan
    NEW YORK, April 10 (Reuters) - Natural gas and cotton
rallied on Wednesday, helping the broader commodities complex
stay firm, as oil, metals and agricultural prices fell on the
back of a stronger dollar and weaker demand outlooks.
    The dollar hit a four-year peak against the yen after
minutes of the Federal Reserve's March meeting reinforced
expectations the U.S. central bank's bond-buying program might
end sooner rather than later. 
    The Fed's bond-backed monetary stimulus, and the resulting
dollar weakness, had been integral to the rebound in commodity
prices in the first two years after the financial crisis erupted
in 2008.
    The dollar's rally on Wednesday led to mixed oil prices
 , and a lower close in copper  and
gold . Weaker demand outlooks also pressured energy
and metals markets.   
    On the agricultural side, wheat futures fell 2 percent
and soybeans turned lower in volatile dealings after the
U.S. Department of Agriculture's estimates for supplies at the
end of 2012/13 came in well above analysts' estimates.
    Even so, the 19-commodity Thomson Reuters-Jefferies CRB
index ended virtually unchanged, with support from the
run-up in natural gas and cotton.
    The advances in gas and cotton came after they had given up
some of their hefty first-quarter gains last week.
    Gas futures on the New York Mercantile Exchange jumped more
than 3 percent at one point, boosted by expectations of another
late-season withdrawal in U.S. gas stockpiles, to be reported on
    With milder, spring-like weather on tap for consuming
regions of the nation, traders expect heating demand for gas to
be limited. But some note that an unusual number of power plant
outages at this time of the year were helping to lift demand for
gas-fired power generation. 
    In addition, hurricane forecasters at Colorado State
University issued their first outlook for the 2013 Atlantic
hurricane season on Wednesday, calling for an above-average
season with 18 tropical storms and nine
    NYMEX's front-month gas contract, May, settled up 6.8
cents, or 1.7 percent, at $4.085 per million British thermal
units. It had rallied to a session high of $4.161, up about 3.5
    On Monday, the contract rose to $4.18, the highest for a
nearby gas contract since August 2011.
    So far this year, natural gas has been the best performing
commodity after cold late-winter weather, above-average nuclear
power plant outages and stronger price expectations pushed
prices up more than 20 percent on the year. 
    Cotton recovered ground after hitting a one-month low in
Tuesday's session.
    The front-month U.S. cotton contract in New York, May
, settled at 85.37 cents per lb, up 0.73 cents or 0.9
    Traders attributed the rebound to Brazil's cutting of import
taxes on raw cotton and India's plan to boost cotton imports
this year.
    May cotton had rallied to 86.53 earlier, after falling to a
low of 84.38 cents on Tuesday -- the lowest since early March.
For the year, U.S. cotton is up nearly 15 percent. 
 Prices at 2:54 p.m. EDT (1854 GMT)      
                             LAST/      NET    PCT     YTD
                             CLOSE      CHG    CHG     CHG
 US crude                    94.51     0.31   0.3%    2.9%
 Brent crude                105.52    -0.73  -0.7%   -5.0%
 Natural gas                 4.085    0.068   1.7%   21.9%
 US gold                   1558.30   -27.90  -1.8%   -7.0%
 Gold                      1561.54   -23.16  -1.5%   -6.7%
 US Copper                  343.85    -2.30  -0.7%   -5.9%
 LME Copper                7575.00   -55.00  -0.7%   -4.5%
 Dollar                     82.530    0.221   0.3%    7.5%
 US corn                    649.00     4.75   0.7%   -7.1%
 US soybeans               1392.75    -2.75  -0.2%   -1.8%
 US wheat                   696.75   -12.00  -1.7%  -10.4%
 US Coffee                  136.05     0.65   0.5%   -5.4%
 US Cocoa                  2214.00    -5.00  -0.2%   -1.0%
 US Sugar                    17.90     0.18   1.0%   -8.3%
 US silver                  27.653   -0.228  -0.8%   -8.5%
 US platinum               1529.20   -22.80  -1.5%   -0.6%
 US palladium               720.85   -12.15  -1.7%    2.5%
 (Editing by Kenneth Barry and Chris Reese)
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