* 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 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
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
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%