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COMMODITIES-Broad rally; cotton at 5-mth high, sugar up off lows
January 16, 2014 / 11:01 PM / 4 years ago

COMMODITIES-Broad rally; cotton at 5-mth high, sugar up off lows

By Barani Krishnan
    NEW YORK, Jan 16 (Reuters) - U.S. commodity markets rose
broadly on Thursday with cotton futures hitting five-month highs
on strong export sales and raw sugar rebounding from a mid 2010
low on short-covering.
    Natural gas joined the run-up, resuming its bullish
streak after a respite on Wednesday. Nickel was also up,
shooting to a 2-1/2 month high on persistent concerns about an
Indonesian ban on exports of unprocessed ores.  
    The Thomson Reuters/Core Commodity Index, a sector
bellwether, rose 0.2 percent after gains in 13 of the 19
commodities it tracked.
    Gasoline was one of the few decliners on the CRB,
falling 1.2 percent on selling stemming from the previous day's
report that fuel usage was down during a recent cold snap. 
    Cotton had the biggest gain of the day, surging 1.7 percent
after strong U.S. weekly export sales data reinforced worries
over tight supplies in the world's top exporter, even as global
inventories swell.
    The benchmark March cotton contract on ICE Futures U.S.
 closed up 1.4 cents at 86.19 cents a lb after surging to
86.67 cents a lb, the highest for a spot cotton contract since
August.
    U.S. government data on Thursday showed U.S. exporters sold
223,700 running bales in the week ending Jan. 9, up from 68,100
bales the previous week during the New Year's holiday lull.
 
    Traders noted that U.S. exports this season will beat the
10.5 million 480-lb bales forecast by the USDA, if sales
continue at this pace.
    "We saw some very good export sales, above market
expectations. That's alleviating some of the worries over the
big Chinese stockpile situation," said Sterling Smith, a futures
specialist with Citigroup in Chicago.
    Global inventories are expected to balloon to 97.6 million
480-lb bales by the end of the 2013/14 crop year end-July, on
the back of a government stockpiling program in top consumer
China. 
    Raw sugar rose 1.4 percent as traders covered short
positions after prices held above the support level of 15
cents/lb.
    March raw sugar futures on ICE closed up 0.22 cent,
or 1.4 percent, at 15.45 cents a lb, after touching a 3-1/2-year
low of 15.10 cents a lb earlier in the session.
    Still, sugar traders braced for a long-term bear market as
abundant global supplies have brought prices down around 25
percent from the one-year high they hit in October.
    "It seems the sugar market is all 'doom and gloom' at the
moment, at least for producers who see their future crops
diminish in value and for traders long of physical inventory and
unable to place their sugar despite the sharp drop in prices,"
Nick Penney, senior trader at Sucden Financial Sugar in London,
wrote in a commentary.
    "The only thing we see on the horizon to support prices is
the fact that so many are bearish (and therefore, we assume,
already short)," Penney wrote. 
    Prices at 5:45 p.m. EDT (2245 GMT)      
                             LAST/      NET    PCT
                             CLOSE      CHG    CHG
Brent crude         107.06    -0.07  -0.1%
Natural gas           4.382    0.000   0.0%
                                                          
US gold             1240.20     1.90   0.2%
Gold                1241.99    -0.10   0.0%
US Copper              3.34    -0.02  -0.5%
LME Copper         7310.00   -42.50  -0.6%
Dollar               80.928   -0.099  -0.1%
CRB              278.416    0.571   0.2%
                                                          
US corn               428.00     2.25   0.5%
US soybeans          1315.00    -3.50  -0.3%
US wheat              572.75     5.00   0.9%
                                                          
US Coffee            118.35     1.15   1.0%
US Cocoa            2753.00     5.00   0.2%
US Sugar              15.45     0.22   1.4%
                                                          
US silver            20.054   19.853   1.6%
US platinum         1430.00     2.90   0.0%
US palladium         743.90    -0.10   0.0%

 (Editing by David Gregorio)

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