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COMMODITIES-Stimulus hopes lift oil; weather woes rally grains
July 16, 2012 / 9:19 PM / in 5 years

COMMODITIES-Stimulus hopes lift oil; weather woes rally grains

* NY, Brent crude oil up more than 1 pct each
    * Corn, wheat up more than 4 percent each

    By Barani Krishnan and Michael Hirtzer
    NEW YORK/CHICAGO, July 16 (Reuters) - Commodities rose on
Monday, adding to last week's gains as investors grew more
hopeful about more monetary easing in China and the United
States, boosting prices of oil and other raw materials.
    On the agricultural side, corn, wheat and soybeans hit new
contract highs as crops withered in extreme heat and drought in
the U.S. Midwest, prompting the government to revise downward
its assessment of crop conditions.
    The dollar's slide against the euro and other
major currencies also aided the rally as commodities priced in
dollars looked more attractive to holders of other currencies. 
. Gold, particularly, got a boost from the dollar's
fall. 
    In China, Premier Wen Jiabao hinted at more monetary easing,
saying his government's efforts to stabilize the economy were
working and that Beijing will step up efforts in the second half
to increase policy effectiveness and foresight. 
    "Prospects of more monetary easing are growing, supporting
risk appetite," analysts at BNP Paribas said in a note. 
    In the United States, traders and investors awaited
Congressional testimony from Federal Reserve Chairman Ben
Bernanke to see if he would signal at a stimulus after Monday's
disappointing U.S. retail sales data for June. U.S. stocks fell
after the retail sales data, pulling copper prices 
 lower. 
    Other than industrial metals, most other commodities rose.
Ten of the 19 commodities in the Thomson Reuters-Jefferies CRB
index, a global benchmark for the asset class, posted
gains. The index finished up 0.7 percent after rising 2.4
percent last week. 
    In Tuesday's session, corn and wheat led gains on the CRB,
rising more than 4 percent each.
    U.S. crude oil, the CRB's biggest component and 
accounting for a quarter of the index's weighting, settled up
1.5 percent, or $1.33, at $88.43 per barrel.
    London's benchmark Brent crude rose 1.1 percent, or
$1.15, to $103.55 per barrel.
    Oil prices were also lifted by news that a U.S. Navy vessel
off the United Arab Emirates fired on a fishing boat that failed
to heed warnings.
    The U.S. Navy incident followed more tough talk over the
weekend from Iran about shutting the Strait of Hormuz as Iran's
dispute with the West over Tehran's nuclear program continues to
keep the region and oil traders tense. 
    
    RED-HOT GRAINS MARKETS
    Corn futures came within a whisker of rising by the 40 cent
daily trading limit, extending a blistering rally before the
release of a U.S. government report showing an unrelenting
drought took a further toll on crops.
    The U.S. Department of Agriculture issued data showing crop
conditions for corn and soybeans were at their worst since 1988.
    The spot September contract for corn settled up 36-1/4
cents, or 4.9 percent, at $7.76-3/4 per bushel. The market was
also supported by updated weather forecasts that scaled back
rains in the eastern Midwest and reports of a high pressure
ridge likely to block moisture in the western part of the region
where most of the U.S. corn and soybeans are grown. 
    The drought, the worst in 24 years, was taking a heavy toll
in the Midwest even in states like Nebraksa, where a large
portion of the state's farmland is irrigated. 
    The state ordered more than 1,100 of its farmers to halt
irrigating crops because the rivers from which they draw water
are being depleted by the drought. 
    Soybeans for November delivery, the first contract to
reflect the autumn harvest, finished up 38 cents, or 2.5
percent, at $15.90-1/2 a bushel.
    September wheat closed up 36-3/4 cents, or 4.3
percent, at $8.84-1/2 a bushel, after reaching $8.89 earlier, a
1-1/2-year high on a continuous chart.
    
 Prices at 4:39 p.m. EDT (2039 GMT)      
                             LAST/      NET    PCT     YTD
                             CLOSE      CHG    CHG     CHG
 US crude                    88.21     1.11   1.3%  -10.7%
 Brent crude                103.58     1.15   1.1%   -3.5%
 Natural gas                 2.801   -0.073  -2.5%   -6.3%
 
 US gold                   1592.70    -0.50   0.0%    1.7%
 Gold                      1589.45    -0.58   0.0%    1.6%
 US Copper                  348.50    -1.90  -0.5%    1.4%
                              
 Dollar                     83.123   -0.225  -0.3%    3.7%
 CRB                       295.980    2.020   0.7%   -3.1%
 
 US corn                    772.50    30.75   4.2%   19.5%
 US soybeans               1590.50    38.00   2.5%   32.7%
 US wheat                   903.75    31.75   3.6%   38.5%
 
 US Coffee                  183.95    -2.15  -1.2%  -19.4%
 US Cocoa                  2197.00   -19.00  -0.9%    4.2%
 US Sugar                    23.00     0.01   0.0%   -1.0%
 
 US silver                  27.321   -0.048  -0.2%   -2.1%
 US platinum               1416.30   -17.90  -1.2%    0.8%
 US palladium               577.85    -7.80  -1.3%  -11.9%

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