REFILE-COMMODITIES-Biggest drop in 18 mths; China, Bernanke roil markets

Thu Jun 20, 2013 11:57pm IST

(Removes mistaken link to graphic)
    * China manufacturing survey, Fed stimulus exit plan weigh
    * CRB index down 2.5 pct, biggest drop since Dec 2011
    * Gold at 2-1/2 year low, crude oil sinks 3 pct
    * Copper at 20-month low; aluminum, nickel multiyear lows
    * Corn, soy and wheat not spared; sugar, coffee tumble

    By Barani Krishnan
    NEW YORK, June 20 (Reuters) - Commodities suffered their
biggest selloff in a year and a half on Thursday as bleak
Chinese data and the U.S. Federal Reserve's plan to reduce its
stimulus efforts hurt the outlook for global growth.
    Gold hit a 2-1/2 year low and oil sank 3 percent. Copper
prices dropped to a 20-month low while aluminum and nickel fell
to multiyear lows on worries about slowing factory activity in
China, the world's largest buyer of metals.
    Agricultural markets were not spared either, with corn
, wheat and soybeans all down and sugar 
and coffee setting multiyear lows.   
    A broad rally in the dollar, powered by Fed Chairman
Ben Bernanke's outline on Wednesday of a possible timeline for
the U.S. central bank's winding down of its stimulus, led to
steep declines in commodities denominated in the greenback.
 
    "Today's slide could be one for the history books, at least
in gold," said Edward Meir, an analyst at INTL FC Stone.
    The 19-commodity Thomson Reuters-Jefferies CRB index
 was down 2.5 percent, its sharpest decline since
December 2011.
    Gold and silver fell to a September 2010 low after Bernanke
said the Fed could start paring $85 billion of monthly bond
purchases later this year its . 
    The flood of easy money created by the Fed since the
2008-2009 financial crisis has been integral to rallies in gold
and other commodities. Bernanke indicated the stimulus programs
could stop by mid-2014 if the U.S. economy is strong enough.
    His remarks went far beyond a communique by Fed policymakers
earlier on Wednesday after a two-day meeting, which said the
central bank will continue its bond purchases for now and 
"closely monitor incoming information on economic and financial
developments in coming months." 
    "Once the U.S. Federal Reserve starts to taper the asset
purchases, we are likely to see a stronger U.S. dollar.
Commodities that are priced in the dollar will tend to weaken in
this kind of environment," said Lee Chen Hoay, investment
analyst at Phillip Futures in Singapore. 
    Gold's selloff accelerated after it broke through its April
low of $1,321 an ounce, a key support level, to touch $1,285
levels.
    By 1440 GMT, the spot price of bullion was down about
4 percent at $1,301.56 an ounce by 1440 GMT. U.S. gold futures
 for August delivery were down more than $74 to hover at
$1,298 an ounce. 
    Oil prices fell around $3 a barrel after a survey of Chinese
manufacturing activity in June heightened the risk of a sharper
slowdown this quarter in the world's second-largest oil
consumer. 
    Benchmark Brent crude oil out of Europe's North Sea 
traded below $103 a barrel versus Wednesday's close of $106.12
    In New York, the front-month contract for U.S. crude 
hovered around $95 a barrel after the previous session's
settlement at $98.24. 
    Copper's slide was pressured partly by climbing stockpiles
of the metal at warehouses monitored by the London Metal
Exchange. Inventories are at around 10-year highs, contributing
to the 14 percent drop in prices this year. MCUSTX-TOTAL 
    Copper's benchmark three-month futures contract on the LME
 fell to $6,750 per tonne, its lowest level since Oct.
20, 2011. It was down 2.7 percent at $6,770 by 1438 GMT.
    
 Prices at 10:56 a.m. EDT (1456 GMT)                       
 
                               LAST      NET    PCT     YTD
                                         CHG    CHG     CHG
 US crude                     95.70    -2.54  -2.6%    4.2%
 Brent crude                 103.06    -3.06  -2.9%   -7.2%
 Natural gas                  3.888   -0.075  -1.9%   16.0%
 
 US gold                    1296.60   -77.20  -5.6%  -22.6%
 Gold                       1297.11   -53.58  -4.0%  -22.5%
 US Copper                     3.06    -0.08  -2.5%  -16.1%
 LME Copper                 6791.00  -169.00  -2.4%  -14.4%
 Dollar                      82.057    0.629   0.8%    6.9%
 CRB                        280.668   -7.290  -2.5%   -4.9%
 
 US corn                     673.50    -8.75  -1.3%   -3.5%
 US soybeans                1509.25   -13.75  -0.9%    6.4%
 US wheat                    702.25    -4.75  -0.7%   -9.7%
 
 US Coffee                   117.65    -5.10  -4.2%  -18.2%
 US Cocoa                   2193.00   -43.00  -1.9%   -1.9%
 US Sugar                     16.46    -0.51  -3.0%  -15.6%
 
 US silver                   19.935   -0.017  -7.8%  -34.0%
 US platinum                1376.60   -47.30  -3.3%  -10.5%
 US palladium                677.55   -17.30  -2.5%   -3.7%
 
 (Additional reporting by Lewa Pardoumuan in Singapore; Editing
by Kenneth Barry)
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