* Copper hit by weak factory data in China
* Raw sugar nears 3-year low on signs on more Brazil output
* Dollar strength to yen, euro further pressures commodities
* Cocoa higher as stocks damaged, natgas up on cool weather
By Barani Krishnan
NEW YORK, May 14 Copper had its sharpest price
drop in two weeks as weak factory data from China fed fears on
Tuesday that demand for the metal was stalling, while raw sugar
neared a 3-year low on signs of a growing bumper harvest in top
producing country Brazil.
The dollar gained against the yen and the euro
for a fourth straight session, turning those holding
other major currencies away from dollar-denominated raw
materials that included oil, gold and corn
Not all commodities were down though.
Cocoa rose more than 1 percent, reacting to reports
of damaged stockpiles of the beverage and confection commodity
in Antwerp warehouses that could not be delivered against the
spot contract for cocoa in New York.
U.S. natural gas rallied more than 2 percent, ending
up for a second straight day, as cool Northeast weather early
this week increased gas-fired heating.
The Thomson Reuters-Jefferies CRB index, a
bellwether for commodities, fell 0.4 percent after 11 of the 19
markets it tracked ended in negative territory.
Three-month copper on the London Metal Exchange
closed down 2.3 percent at $7,245 a tonne, the biggest decline
in two weeks and reversed gains of half a percent in the
In New York, U.S. copper futures for July delivery
settled down 2.1 percent at $3.2880 a lb.
CHINA WOES HIT COPPER
Data on Monday showed China's factory output growth was
surprisingly weak in April, while fixed-asset investment also
slowed, rekindling concerns that a nascent recovery in the
world's top copper consumer is stalling.
The numbers initially lifted copper prices on hopes they
would prompt Beijing to ease monetary policy, but those hopes
were dashed after comments in China's official media on Tuesday
suggested the government was unlikely to follow that route.
Copper hit its highest in nearly a month last Wednesday at
$7,480 a tonne. It had recovered about 9 percent from 18-month
lows below $6,800 touched on April 23, but is still down almost
7 percent for the year.
"It's the drip, drip, drip of pointers suggesting the period
of rapid Chinese demand growth has come to an end. There is
(also) a sense that the Chinese authorities are reasonably happy
to have economic growth sub-8 percent," BNP Paribas analyst
Stephen Briggs said.
Market data also showed copper stockpiles in London Metal
Exchange warehouses rose by 12,000 tonnes to 618,700 tonnes,
edging back towards a recent peak of 621,600 tonnes, which was
the highest in almost a decade.
BUMPER BRAZILIAN SUGAR
Raw sugar futures hit a 34-month low, extending the previous
session's losses, as industry data showed sugar production in
Brazil surged last month and the pace of the top producer's
bumper harvest picked up, dealers said.
July raw sugar futures on ICE Futures U.S. settled
down 1.3 percent at 17.02 cents a lb, after touching 17.00
cents, the lowest price since July 2010.
It was the largest one-day loss in almost two weeks. Raw
sugar prices have reached fresh lows over the past two sessions
as forecasts for hefty output in Brazil began to be realized,
"There is no notable support below these levels, until we
hit the 2010 lows of 13 cents (spot contract), which means
producers are likely to assess the current market with a fair
degree of nervousness," said Luke Mathews, commodities
strategist at Commonwealth Bank of Australia.
Traders gathered for New York Sugar Week said they thought
it likely global prices would trend toward 16 cents a lb.
Sugar production in Brazil's main cane belt surged in April,
outpacing last year's early harvest, as rains cleared to allow
crushing of the record crop to accelerate, industry association
"Cane production is up, sugar production is up, and the
ethanol mix wasn't as aggressive as we thought," said Michael
McDougall, vice president for Newedge in New York.
Dealers previously said they expected mills to focus more of
the cane harvest toward ethanol production than toward sugar
after the Brazilian government mandated an increase in the
amount of ethanol in its fuel blend.
A shift toward ethanol production was seen as supportive to
Prices at 4:22 p.m. EDT (2022 GMT)
LAST/ NET PCT YTD
CLOSE CHG CHG CHG
US crude 94.29 -0.88 -0.9% 2.7%
Brent crude 102.60 -0.22 -0.2% -7.7%
Natural gas 4.024 0.099 2.5% 20.1%
US gold 1424.50 -9.80 -0.7% -15.0%
Gold 1425.36 -4.69 -0.3% -14.9%
US Copper 328.80 -7.15 -2.1% -10.0%
LME Copper 7245.00 -170.00 -2.3% -8.6%
Dollar 83.581 0.304 0.4% 8.9%
US corn 706.75 -11.25 -1.6% 1.2%
US soybeans 1524.50 3.50 0.2% 7.5%
US wheat 701.50 0.00 0.0% -9.8%
US Coffee 144.00 -1.75 -1.2% 0.1%
US Cocoa 2353.00 27.00 1.2% 5.2%
US Sugar 17.02 -0.23 -1.3% -12.8%
US silver 23.379 -0.317 -1.3% -22.7%
US platinum 1501.90 17.40 1.2% -2.4%
US palladium 727.15 8.45 1.2% 3.4%