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COMMODITIES-Markets steady, await progress in Syria weapons handover
September 11, 2013 / 10:42 PM / 4 years ago

COMMODITIES-Markets steady, await progress in Syria weapons handover

NEW YORK, Sept 11 (Reuters) - Most commodities were little changed on Wednesday with benchmark crude oil above $111 a barrel and copper holding steady too, as investors worried about whether diplomatic efforts would avert a proposed U.S. strike on Syria.

An exception to the steady trend was cocoa, which rallied to touch its highest price in a year. Another soft commodity, arabica coffee, jumped 3.6 percent.

A weaker U.S. dollar supported commodities priced in the currency. The greenback fell to near two-week lows against a basket of major currencies as some investors bet against the Federal Reserve cutting its stimulus for the U.S. economy when the central bank meets next week.

The 19-commodity Thomson Reuters-Jefferies CRB index rose by a marginal 0.2 percent after markets weighed the U.S. plan to hold back an attack on Syria if Damascus surrenders its chemical weapons.

President Barack Obama pledged on Tuesday to explore the Russian-brokered diplomatic plan, but also voiced skepticism that it will work and urged Americans to support his threat to use military force if needed.

Benchmark Brent crude oil out of Europe’s North Sea rose 25 cents to settle at $111.50 a barrel. In the past two days, Brent fell more than 4 percent, dropping to a two-week low on Tuesday.

“The market’s given back as much as it’s going to over Syria, and that attracted some buyers who are still worried about what’s going to happen there,” said John Kilduff, partner at Again Capital LLC.

In copper, the three-month contract on the London Metal Exchange closed at $7,170 a tonne, unchanged from Tuesday’s close.

Traders said copper drew strength from the latest developments in Syria, and prospects for economic improvement in top consumer China.

Copper prices have risen more than 8 percent since touching three-year lows in June on mounting evidence that a slowdown in China was bottoming out. For the year though, the market is still down 9 percent.

This week, headline China trade data showed overall imports and exports in August were stronger than expected, indicating that the world’s top commodity buyer may have avoided a sharp slowdown.

Cocoa rallied to one-year highs on speculator-driven buying. December futures for the beverage and confection commodity closed up $1 at $2,571 per tonne in New York, after surging to $2,599.

Another big gainer was arabica coffee futures, which rallied 3.6 percent, the biggest daily gain since July, with investors covering short positions as they worried that dry weather might damage yields in top grower Brazil.

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