May 10, 2013 / 6:21 PM / in 5 years

COMMODITIES-Dollar rally punishes oil, gold; USDA hurts grains

* Dollar rally versus yen weighs heavily on most commodities
    * Oil down about 2 pct, gold hits 2-week low
    * Copper rises, bucking trend, as metal stockpiles drop
    * Grains tumble after USDA crop data tops market forecasts

    By Barani Krishnan
    NEW YORK, May 10 (Reuters) - A resurgent dollar weighed
heavily on commodities on Friday, causing oil its biggest loss
in more than a week and pulling gold prices to a 2-week low,
while data indicating plentiful U.S. crop supplies extended the
toll on grains futures.
    Copper bucked the trend, closing up for the day and
a third straight week, as stockpiles of the metal fell in
warehouses monitored by trading exchanges in London and
    By 2:00 p.m. EDT (1800 GMT), the 19-commodity Thomson
Reuters-Jefferies CRB index was down about 1 percent
for the session and week. Many commodities tracked by the CRB
fell about 2 percent or more, including crude oil, gold, wheat,
corn, coffee, cocoa and cotton.
    Traders blamed the U.S. dollar for much of the declines.
    A strong dollar makes dollar-denominated commodities, such
as oil and copper, pricier when purchased with other currencies,
weighing on their demand outside of the United States.
    The dollar rallied to a 4-1/2-year high against the yen on
Friday on data showing Japanese investors buying more foreign
assets. Further dollar-yen appreciation was likely as Japan's
aggressive monetary easing takes effect, currency traders said.
The euro also fell against the dollar. 
    "The higher dollar is putting on pressure - there's a lot of
volatility in currencies and there is no strong underlying
demand for oil," said Olivier Jakob of Petromatrix in Zug,
    Stockpiles of crude oil in the United States, the world's
largest oil consumer, hit another record high last week due to
growing domestic production, government data showed. 
    U.S. crude oil traded below $95 a barrel, versus
Thursday's close of $96.39.
    Brent crude out of Europe's North Sea, the more
important benchmark for oil, hovered at around $102 a barrel,
after Thursday's close at $104.47. The session low was $101.56.
The drop in Brent was the largest since the market fell below
$100 on May 1 on renewed worries about U.S. and China growth.
    Gold fell 2.5 percent to a two-week low, on track for its
biggest one-day drop since mid-April, as a breach of key chart
levels prompted heavy selling in the precious metal. 
    Traders said sell stops - automatic sale orders placed by
traders at pre-set levels to limit losses - were triggered as
gold broke support at $1,445 and $1,440 an ounce, prompting a
sharp move down to session lows of $1,428.40.
    "If we close below $1,425, we could see $1,400," said Afshin
Nabavi, head of trading at London's MKS. "A break below that
level could see the market going very messy."
    Gold had plunged to below $1,322 an ounce on April 16, its
lowest in more than two years, after stop-sell orders below
$1,525 triggered heavy liquidation.
    Corn and wheat tumbled in Chicago trading after the U.S.
Department of Agriculture said it expected the domestic corn
crop to deliver a record 14.14 billion bushels despite lower
yields from a late start to the planting season. 
    U.S. corn ending-stocks for 2013/14 would hit 2.004 billion
bushels, nearly triple the 759 million forecast for the Aug. 31
end of this marketing year, and marginally above the trade
estimates, the USDA said.
    The agency also forecast a record large crop for soybeans
that will end 3 years of punishingly tight supplies.
    Corn for July delivery on the Chicago Board of Trade
stood at around $6.35 a bushel, versus Thursday's close of
    July wheat hovered at around $7.05 a bushel, versus
the previous settlement of $7.23-1/2.
    Soybeans for July were slightly lower, at around
$14.03 a bushel versus Thursday's close above $14.08.
 Prices at 2:01 p.m. EDT (1801 GMT)                       
                              LAST      NET    PCT     YTD
                                        CHG    CHG     CHG
 US crude                    94.78    -1.63  -1.7%    3.2%
 Brent crude                102.84    -1.63  -1.6%   -7.4%
 Natural gas                 3.917   -0.065  -1.6%   16.9%
 Gold                      1437.01   -20.69  -1.4%  -14.2%
 US Copper                  335.65     1.60   0.5%   -8.1%
 LME Copper                7391.00    37.00   0.5%   -6.8%
 Dollar                     83.188    0.395   0.5%    8.4%
 US corn                    691.00    -3.50  -0.5%   -1.0%
 US soybeans               1493.25     2.00   0.1%    5.3%
 US wheat                   697.00   -19.25  -2.7%  -10.4%
 US Coffee                  144.20    -3.70  -2.5%    0.3%
 US Cocoa                  2305.00   -44.00  -1.9%    3.1%
 US Sugar                    17.39    -0.08  -0.5%  -10.9%
 US silver                  23.630   -0.281  -1.2%  -21.8%
 US platinum               1487.90   -28.60  -1.9%   -3.3%
 US palladium               705.25    -9.50  -1.3%    0.3%
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