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COMMODITIES-Grains rally, euro hopes drive commods index to 4-month high
August 21, 2012 / 8:07 PM / 5 years ago

COMMODITIES-Grains rally, euro hopes drive commods index to 4-month high

* TR CRB commods index up almost 1 pct, 6th daily gain
    * Investors expect ECB to intervene in debt markets
    * Brent crude up 1 pct, copper 2 pct, gold highest since May

    By Jonathan Leff
    NEW YORK, Aug 21 (Reuters) - Grain prices led a wide rally
across commodity markets on Tuesday, propelling a benchmark
index to the highest since April as raw materials such as oil
and copper climbed on hope for central bank action to end the
euro zone debt crisis.
    In Chicago, new-crop soybean prices surged past $17 a
bushel for the first time ever while corn closed in on a
new record high as traders bet end-users would scramble for
dwindling supplies after the worst drought in decades. China's
corn imports in July rose to the second highest on record.
    Other commodities rallied on mounting speculation that the
European Central Bank (ECB) would intervene in debt markets to
limit the rise in Spanish and Italian borrowing costs. The
latest hope was fueled by a story in London's Daily Telegraph,
which lent support to a previous weekend report.
    The euro surged to a seven-week high and the dollar index
 fell 0.6 percent. A cheaper dollar encouraged investors
to buy dollar-denominated commodities.
    Brent crude oil rose nearly 1 percent and copper
rose almost 2 percent, breaking out of a month-long
range. U.S. stocks eased, however, on profit-taking from a
four-year high. 
    "We're in the midst of a risk rally, with expectations high
around what could happen in the first couple of weeks of
September," said Camilla Sutton, chief currency strategist at
Scotiabank in Toronto. 
    The Thomson Reuters-Jefferies CRB index rose 0.9
percent, its sixth daily gain in a row and the largest one-day
rise in over to weeks. It reached the highest level since April
3 during intra-day trade, taking two-month gains to 15 percent.
After two lackluster days, trading overall volume improved, with
U.S. futures market turnover just 10 percent below normal.
    Gold prices touched their highest since May, gaining
1.3 percent to $1,637 an ounce. Platinum, which has surged for
the past week on fears that violence at a South African mine
will curtail exports, rose 1 percent. It has risen 8 percent
over four days, the biggest such rally since last October.
    Talk of more stimulus ran rampant as Greece's prime minister
will meet German Chancellor Angela Merkel, French President
Francois Hollande and Eurogroup chief Jean-Claude Juncker this
week to try and secure more funding from the European Union,
International Monetary Fund and ECB. 
    
    OIL GAINS MODEST 
    Brent October crude rose 94 cents, or 0.83 percent,
to settle at $114.64 a barrel, just shy of an over three-month
high hit last week.
    An upcoming maintenance-related North Sea oil production
slide and heightened tensions in the Middle East as violence in
Syria continues and Iran's dispute with the West over Tehran's
nuclear program added to the lift for oil prices. 
    Prices could get another boost from U.S. government
stockpile data on Wednesday expected to show crude stocks inched
up by just 100,000 barrels last week. 
    
    SOY RECORD, CORN NEAR 
    Chicago Board of Trade new-crop November soybeans rose
2.9 percent to $17.32-1/2 a bushel, having earlier hit a new
contract high of $17.34. December corn rose 1.8 percent to
$8.38-3/4 a bushel, near a record $8.49 hit on Aug. 10.
    After consolidating their early summer gains for much of the
past few weeks, the grain markets are once again on the move as
new reports detail the scale of crop damage.
    With a Midwest crop tour finding little good news among the
nation's scorched soy and corn fields, analysts reckon that
still higher prices will be required to temper demand enough to
prevent U.S. grain bins from dropping to zero next summer.
    
    COPPER BREAKS RANGE 
    Three-month copper on the London Metal Exchange 
jumped 2.1 percent to close at $7,610 per tonne, having touched
a session peak of $7,632, the highest since July 20. The metal
breached it $7,300 to $7,600 range of the past month. 
    Trading volume in the New York COMEX futures market was
double the 20-day average, despite the holiday season, 
    Import data from the world's top consumer, meanwhile, showed
a marginal rise for July, with shipments of refined copper into
China at 254,339 tonnes versus 250,097 tonnes in June.
  
    Chief Executive Ivan Glasenberg of Glencore saw
potential for stronger demand in China toward the year-end. 
    "I think we've got to watch China carefully to see what type
of stimulus they will or won't put into place... personally I
believe you will see more infrastructure spending in the second
half," he told a conference call after interim results. 
    
 Prices at 3:24 p.m. EST (1924 GMT)      
                             LAST/      NET    PCT     YTD
                             CLOSE      CHG    CHG     CHG
 US crude                    96.55     0.71   0.7%   -2.3%
 Brent crude                114.57     0.87   0.8%    6.7%
 Natural gas                 2.775   -0.001   0.0%   -7.2%
 
 US gold                   1642.90    19.90   1.2%    4.9%
 Gold                      1636.33    16.24   1.0%    4.6%
 US Copper                  345.30     8.20   2.4%    0.5%
                               
 Dollar                     81.928   -0.528  -0.6%    2.2%
 CRB                       307.630    2.870   0.9%    0.8%
 
 US corn                    837.75    13.75   1.7%   29.6%
 US soybeans               1720.50    46.75   2.8%   43.6%
 US wheat                   930.00    17.75   2.0%   42.5%
 
 US Coffee                  164.20    -0.35  -0.2%  -28.0%
 US Cocoa                  2433.00    25.00   1.0%   15.4%
 US Sugar                    19.78    -0.72  -3.5%  -14.9%
 
 US silver                  29.428    0.835   2.9%    5.4%
 US platinum               1506.80     9.60   0.6%    7.3%
 US palladium               624.20    16.50   2.7%   -4.9%

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