COMMODITIES-Oil down on fiscal cliff worry; grains dive on USDA

Tue Nov 13, 2012 4:32am IST

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* Crude oil, gold end little lower on US fiscal, Greece woes
    * Soy, wheat, corn down 3 pct each as USDA hikes output data

    By Barani Krishnan
    NEW YORK, Nov 12 (Reuters) - Commodities mostly fell on
Monday, sliding with other global markets on U.S. fiscal worries
and concerns over Greece, while grains prices took a hard hit on
U.S. government data pointing to a larger production that
thought.
    The energy and gold markets ended slightly lower, pressured
by fears about the so-called U.S. "fiscal cliff" -- tax
increases and spending cuts that go into effect in 2013 -- and
the lack of an agreement by euro zone governments to disburse
more money to Greece.
    Soybean prices tumbled to a 4-1/2 month low while wheat and
corn saw their biggest selloff since September, reacting to
Friday's data from the U.S. Department of Agriculture that
raised production and global inventory estimates for grains.
 
    The 19-commodity Thomson Reuters-Jefferies CRB index
, settled a touch lower after 11 of the markets it
tracks ended in the negative. Grains aside, losses were seen in
gasoline, crude oil and heating oil.
    "The battle continues between the negativity from the
slowing of the global economy compared to what global stimulus
programs might do to the economy going forward, while
geopolitics have continued to remain an issue," said Dominick
Chirichella, analyst at New York's Energy Management Institute.
    London's benchmark Brent crude oil settled 33 cents
lower at $109.07 a barrel, below the 100-day moving average of
$109.19. 
    U.S. crude front-month futures slipped 50 cents to
settle at $85.57 in New York.
    Tensions in the Middle East, including the West's standoff
with Iran over the OPEC nation's nuclear program, have lifted
oil throughout the year, while worries about the impact of the
struggling global economy on fuel demand have pushed prices
down.
    In Monday's session, prices were supported by Israel's
firing of tank shells into Syria in response to a Syrian mortar
shell that struck the Golan Heights, stirring concerns Israel
could become drawn into the conflict. 
    Data suggesting that implied oil demand in China, the
world's second-largest oil consumer, grew 6.5 percent in October
from a year earlier, also aided prices.
    Prices seesawed through the day before sliding in the
afternoon on worries on whether opposing lawmakers in the U.S.
Congress would agree by Dec. 31 to avert the fiscal-cliff which
threatens to tip the country into recession in 2013.
    In grains, the front-month contract for U.S. soybeans in
Chicago fell 2.8 percent to close at $14.11 a bushel. The
most-actively traded second-month slid 3.2 percent to
$14.05.
    The technically-driven selloff pushed soybean prices down 21
percent from their all-time highs in early September. When a
market drops more than 20 percent over at least two months, it
is considered to have gone beyond a correction and becomes a
technical bear market. 
    "Right now, it's 'get me out' time," said Jerry Gidel, chief
feed grain analyst at Rice Dairy, commenting on the action
across soybeans, wheat and corn.
    Soybeans rallied from June through September after the worst
U.S. drought in more than 50 years led to concerns about
widespread crop destruction. Prices hit a record high of
$17.94-3/4 before gradually falling as harvests proved the
drought fears were overdone.
    Prices are likely to come under even more pressure moving
forward, with expectations for near-record supplies from South
America by March, analysts said. 
    Beneficial rains moved into the southern half of Brazil's
top soy-producing state of Mato Grosso, boosting prospects for
soybean planting and germination, according to local forecaster
Somar. 
    Front-month wheat fell 3.2 percent to $8.57-3/4 a
bushel, while front-month corn dropped 2.8 percent to
$7.18 a bushel.
    
 Prices at 5:48 p.m. EST (2248 GMT)      
                             LAST/      NET    PCT     YTD
                             CLOSE      CHG    CHG     CHG
 US crude                     0.00     0.00   0.0% -100.0%
 Brent crude                108.78    -0.62  -0.6%    1.3%
 Natural gas                 3.570    0.000   0.0%   19.4%
 
 US gold                   1730.90     0.00   0.0%   10.5%
 Gold                      1728.00     0.26   0.0%   10.5%
 US Copper                  346.80     2.25   0.7%    0.9%
 LME Copper                7638.00    68.00   0.9%    0.5%
 Dollar                     81.075    0.049   0.1%    1.1%
 
 
 US corn                    718.00   -20.75  -2.8%   11.1%
 US soybeans               1411.00   -41.00  -2.8%   17.7%
 US wheat                   857.75   -28.75  -3.2%   31.4%
 
 US Coffee                  153.05     3.15   2.1%  -32.9%
 US Cocoa                  2381.00    23.00   1.0%   12.9%
 US Sugar                    19.36     0.30   1.6%  -16.7%
 
 US silver                  32.522   -0.077  -0.2%   16.5%
 US platinum               1564.50     7.10   0.5%   11.4%
 US palladium               608.05    -3.00  -0.5%   -7.3%
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