COMMODITIES-Mostly down, nervously eyeing unresolved US budget

Sat Dec 29, 2012 4:08am IST

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* Oil down modestly for the day, up on week and the year
    * Gold, copper also down on day but up on the year
    * Natgas has biggest year since shale gas revolution of 2007
    * Soybeans best performer for 2012; coffee worst

    By Barani Krishnan
    NEW YORK, Dec 28 (Reuters) - Commodities ended broadly lower
in nervous trading on Friday as traders and investors followed
last-ditch attempts by U.S. politicians to resolve a fiscal
crisis before the year-end.
    Most markets were on tenterhooks as President Barack Obama
held a meeting at the White House with congressional leaders
from the Democratic and Republican parties to restart stalled
talks on the budget. 
    The dollar rose, U.S. Treasury yields hit two-week lows and
stocks on Wall Street fell for a fifth straight day as the
president and his political rivals sought to avoid $600 billion
in tax increases and spending cuts that take effect on Jan. 1. 
    Many economists have warned that failure to reach a deal
will tip the U.S. economy over a "fiscal cliff" and into
possible recession.
    Supply-demand factors -- such as the unexpected surge in
U.S. gasoline stockpiles in the world's largest oil consumer --
further weighed on prices.
    Fourteen of the 19 markets on the Thomson Reuters-Jefferies
CRB index settled in negative territory -- pushing the
broad commodities gauge down half a percent on the day, although
it rose slightly on the week due to modest gains in recent
sessions.
    Of the few markets that bucked the trend, wheat hit a 2-year
high on soaring U.S. exports of the grain and natural gas ran up
on cold weather forecasts over much of the United States over
the next 10 days.  
    
    WASHINGTON SETS TONE
    "All eyes are on Washington," said Addison Armstrong, senior
director for market research at Tradition Energy, referring to
the 11th-hour deliberations over fiscal issue.
    Oil's benchmark Brent crude in London fell 18 cents
to settle at $110.62 a barrel, after it tested a support below
the 200-day moving average at $109.94.
    U.S crude fell 7 cents to $90.80. It dipped below its
100-day moving average after rising as high as $91.49 during the
session, the highest front-month price since October.
    Trading in oil remained thin due to the holiday season.
Volume in Brent was 40 percent below the 30-day norm. Activity
in U.S. crude was down by around half.
    Weekly data from the U.S. Energy Information Administration
showed U.S. gasoline stocks rose by 3.8 million barrels last
week, capping a five-week build of nearly 23 million barrels.
Demand for the motor fuel is down 2.8 percent from the same
period of 2011. The weekly build in gasoline stocks was larger
than analysts had expected.
    
    SOYBEANS BEST PERFORMER FOR 2012; COFFEE WORST
    Despite its weakened positioned now, oil is still headed for
a fourth straight year of gains, although its annual rise itself
-- 3 percent -- is the smallest since the rebound from the 2008
financial crisis.
    Gold prices  fell for the day and week as
traders priced the market lower while awaiting the outcome of
the U.S. budget talks. For the year, gold is up nearly 6
percent, extending its unbeaten run for a 12th year, although
its 2012 gain is one of the slimmest in decade. Gold is also
having its worst quarter since the middle of 2004. 
    Copper prices fell too in Friday's session, although
signs of a recovering economy in top metals buyer China limited
losses. Copper is poised to finish the year up 4 percent,
rebounding from a 2011 loss. 
    Natural gas, one of the outperformers in Friday's
market, was headed for a near 12 percent gain on the year, its
best since 2007, just before the revolution in shale gas supply
really took off.
    Soybeans, which rose modestly on the day, is set to be
the year's biggest gainer, with a 19 percent annual gain, driven
by the worst U.S. drought in decades that destroyed a huge swath
of the soy crop this summer. 
    Arabica coffee, by far, is the worst performer of the
year, falling more than 35 percent and headed for a second year
of losses due to concerns over record global production.
    
 Prices at 5:18 p.m. EST (2218 GMT)      
                             LAST/      NET    PCT     YTD
                             CLOSE      CHG    CHG     CHG
 US crude                    90.62    -0.25  -0.3%   -8.3%
 Brent crude                110.38    -0.42  -0.4%    2.8%
 Natural gas                 3.469    0.057   1.7%   16.1%
 
 US gold                   1655.90    -7.80  -0.5%    5.7%
 Gold                      1655.29     0.39   0.0%    5.9%
 US Copper                  358.95    -1.15  -0.3%    4.5%
 LME Copper                7887.00   -28.00  -0.4%    3.8%
 Dollar                     79.679    0.059   0.1%   -0.6%
 
 
 US corn                    694.00     2.50   0.4%    7.3%
 US soybeans               1424.00     5.25   0.4%   18.8%
 US wheat                   778.75     6.50   0.8%   19.3%
 
 US Coffee                  146.85    -1.05  -0.7%  -35.6%
 US Cocoa                  2249.00    -6.00  -0.3%    6.6%
 US Sugar                    19.42    -0.03  -0.2%  -16.4%
 
 US silver                  29.975   -0.265  -0.9%    7.4%
 US platinum               1517.40   -14.40  -0.9%    8.0%
 US palladium               700.30    -8.20  -1.2%    6.7%
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