COMMODITIES-Fresh optimism over Fed, Cyprus helps snap 2-day loss
* Fed's pledge for continued stimulus drives rebound * Cyprus' move to seek new bailout plan also helps * Brent crude and copper up about 1 pct each * Wheat at 3-week high, corn at 7-week peak By Barani Krishnan NEW YORK, March 20 (Reuters) - Commodities rallied on Wednesday as the U.S. central bank's assurance of continued stimulus for markets and an easing of worries over Cyprus drove oil, metals and crop prices higher, snapping two days of losses. The dollar's retreat from a four-month high against the euro also made commodities priced in the greenback more attractive to holders of the single European currency. Oil's benchmark Brent crude futures rose 1 percent in London trading, rebounding from a three-month low. Copper futures also gained about 1 percent in London as some buyers saw a bargain for the metal that hit a seven-month low on Tuesday. Some closed out short positions they had on copper, as comments gathered pace this week that the metal was probably oversold. In Chicago's grain markets, wheat futures rose to a three-week high on brisk demand from feeders and exporters. Corn futures hit a six-week high, buoyed by tight stockpiles, slow farmer sales and a strong physical market. Among other crop futures in New York, cocoa jumped more than 2 percent while arabica coffee rose almost half a percent to close up for the first time in eight sessions. The Thomson Reuters-Jefferies CRB index, a closely-watched indicator for commodities, ended up 0.6 percent, after losing 1.2 percent in two earlier sessions combined. Twelve of the 19 markets tracked by the index rose. Gold was one of the few markets that ended down, as safe-haven demand for bullion weakened with the improved market sentiment. MARKETS COMFORTED BY FED, CYPRUS ACTION The broad rally was powered by the U.S. Federal Reserve's pledge to continue buying $85 billion in mortgage and Treasury bonds a month despite growing concerns about the risks the purchases could pose. The Fed said unemployment remains too high and fiscal policy has become somewhat "more restrictive," likely referring to hefty spending cuts by the U.S. government. In Cyprus's case, it bought more time to come up with a rescue plans for its banks by ordering them to stay shut until next week as the government scrambled to put together a new bailout proposal after rejecting the conditional offer set forth by the European Union. The uncertainty about Cyprus's finances has revived concern about the stability of the euro zone and of the downside risks to global economic growth. "Clearly, market players anticipate that an alternative solution will be found for Cyprus," said Carsten Fritsch, an oil analyst at Commerzbank in Frankfurt. OIL, METALS UP; GOLD DOWN Brent crude rose $1.27 to settle at $108.72 a barrel. It had dropped nearly 2 percent to a three-month low on Tuesday. U.S. crude's front-month contract rose 80 cents to $92.96 per barrel. In metals, three-month copper on the London Metal Exchange closed up $90 at $7,620 a tonne. It had fallen to a seven-month low of $7,486.25 on Tuesday. Aluminum closed at $1,939 a tonne from $1,936.50 in the previous session. The spot price of gold was down 0.4 percent at below $1,606 per ounce. Prices at 6:13 p.m. EST (2213 GMT) LAST/ NET PCT YTD CLOSE CHG CHG CHG US crude 93.45 -0.05 -0.1% 1.8% Brent crude 108.58 1.13 1.1% -2.3% Natural gas 3.960 0.000 0.0% 18.2% US gold 1607.50 -3.80 -0.2% -4.1% Gold 1606.08 0.19 0.0% -4.1% US Copper 343.55 4.00 1.2% -5.9% LME Copper 7620.00 90.00 1.2% -3.9% Dollar 82.838 -0.151 -0.2% 7.9% US corn 732.50 4.00 0.6% 4.9% US soybeans 1419.75 13.00 0.9% 0.1% US wheat 736.00 14.00 1.9% -5.4% US Coffee 133.60 0.50 0.4% -7.1% US Cocoa 2152.00 53.00 2.5% -3.8% US Sugar 18.35 0.04 0.2% -5.9% US silver 28.817 -0.026 -0.1% -4.7% US platinum 1582.50 27.10 1.7% 2.8% US palladium 758.20 23.00 3.1% 7.8%
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DAVOS, Switzerland - Central banks have done their best to rescue the world economy by printing money and politicians must now act fast to enact structural reforms and pro-investment policies to boost growth, central bankers said on Saturday.
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