Crude Oil, Corn Rise on Supply Threats: Commodities at the Close

The Standard & Poor’s GSCI gauge of 24 commodities climbed 1.2 percent to close at 653.35 at 3:49 p.m., the highest level since Dec. 7.

The UBS Bloomberg CMCI index of 26 raw materials increased to 1,518.97 at 4:14 p.m.

CRUDE OIL

Crude oil rose for a sixth day, the longest stretch in 13 months, as Iran threatened to block transportation through the Strait of Hormuz and confidence among U.S. consumers beat expectations in December.

Crude advanced after Iran’s official Islamic Republic News Agency cited Vice President Mohammad Reza Rahimi as saying the country would bar shipments through the strait if sanctions are imposed on its oil exports. Prices also gained as the Conference Board’s index reached the highest level since April, exceeding all forecasts in a Bloomberg survey.

Crude oil for February delivery climbed $1.66, or 1.7 percent, to settle at $101.34 a barrel on the New York Mercantile Exchange. The contract reached $101.77, the highest level since Dec. 7. Futures have climbed 11 percent this year after increasing 15 percent in 2010.

Brent oil for February settlement gained $1.31, or 1.2 percent, to $109.27 a barrel on the London-based ICE Futures Europe exchange. The European contract’s premium to crude in New York was $7.93 a barrel. That’s down from $8.28 at the close of trading Dec. 23, and the smallest differential based on settlement prices since Jan. 20.

Markets in New York and London were shut yesterday because of the observance of Christmas and will be closed on Jan. 2 for New Year’s Day.

OIL PRODUCTS

Heating oil rose after a report that U.S. consumer confidence increased in December to an eight-month high and Iran threatened to block the flow of crude oil.

Futures advanced as the Conference Board’s index jumped to 64.5 from a revised 55.2 reading in November.

January-delivery heating oil gained 1.78 cents, or 0.6 percent, to settle at $2.9085 a gallon on the New York Mercantile Exchange. Prices have risen 14 percent this year.

Gasoline futures for January rose 0.16 cent to settle at $2.6888 a gallon, a seven-week high. Prices climbed 8 percent last week, the biggest weekly gain since March, and are up 9.6 percent this year.

NATURAL GAS

Natural gas in New York fluctuated as speculation that below-normal temperatures may boost demand for the fuel without curbing a growing inventory surplus.

Futures advanced as much as 2.2 percent and fell as much as 1.2 percent. Temperatures in Boston will drop to 14 degrees Fahrenheit (minus 10 Celsius) on Jan. 6, 9 below normal, New York will reach 24 degrees, 3 below normal, and Washington will dip to 27 degrees, 2 below average, according to AccuWeather Inc. in State College, Pennsylvania.

Natural gas for January delivery fell 0.2 cent to settle at $3.112 per million British thermal units on the New York Mercantile Exchange. Futures have declined 29 percent this year.

GRAINS, OILSEEDS

Corn rose, capping the longest rally in a year, and soybeans jumped the most in 11 weeks on speculation that adverse weather threatens to reduce output in South America, bolstering demand for U.S. supplies.

About 50 percent of the crops in Argentina will be dry in the next 10 days after weekend rain stayed north of the main growing regions, Commodity Weather Group LLC said in a report. As much as a third of Brazil’s crops face a lack of rain, the forecaster said.

Corn futures for March delivery advanced 2.2 percent to close at $6.3325 a bushel at 1:15 p.m. on the Chicago Board of Trade, the seventh straight gain and the longest rally since Dec. 29, 2010. Earlier, the grain reached $6.3675, the highest level for a most-active contract since Nov. 17.

Soybean futures for March delivery rose 3.2 percent to $12.095 a bushel, the biggest advance since Oct. 11. It was the eighth straight gain, the longest rally since mid-July. Earlier, the oilseed reached $12.15, the highest level since Nov. 8.

Wheat futures for March delivery gained 3.7 percent to settle at $6.4475 a bushel at 1:15 p.m. in Chicago, the biggest gain since Nov. 29. The commodity advanced for a seventh straight session, the longest rally since the similar period ended Jan. 26. Today, prices touched $6.47, the highest level for a most-active contract since Nov. 16.

The grain is still down 19 percent this year, heading for the biggest annual loss since 2008, as countries including Russia, Australia and Canada boosted production.

SOFT COMMODITIES

Sugar rose for the third straight session on lower production in Thailand, the world’s second-largest exporter. Coffee, cotton and orange juice also gained, while cocoa slid.

Thailand’s sugar output has declined 4.7 percent to 1.62 million metric tons in the season that started Nov. 15. The dollar fell for the fourth straight session against a basket of major currencies, enhancing the appeal of commodities as alternative assets.

Raw sugar for March delivery rose 0.1 percent to settle at 23.61 cents a pound at 2 p.m. on ICE Futures U.S. in New York. The price climbed 1.2 percent in the previous two sessions. Brazil is the top grower and exporter.

Sugar has dropped 26 percent in 2011, partly because Europe’s debt woes have eroded commodity demand. The sweetener climbed in the previous three years.

Arabica-coffee futures for March delivery climbed 1.5 percent to $2.2285 a pound in New York. The price has dropped 7.3 percent this year, heading for the first annual slide since 2008.

Cotton futures for March delivery gained 0.8 percent to 87.91 cents a pound. This year, the fiber has plunged 39 percent, the most since 2004.

Orange-juice futures for March delivery climbed 1.6 percent to $1.6995 a pound. Earlier, the price reached $1.7095, the highest level for a most-active contract since Dec. 9.

Cocoa futures for March delivery slid 0.1 percent to $2,216 a ton. This year, the price has tumbled 27 percent, heading for the biggest drop since 1999.

PRECIOUS METALS

Gold fell to a one-week low on concern that Europe’s debt crisis may escalate and weigh on global growth.

International Monetary Fund Managing Director Christine Lagarde said global growth is in danger because of Europe’s financial crisis. Some Bank of Japan board members said downside risks to the economy had increased, citing Europe’s debt woes and the yen’s appreciation, according to minutes of the bank’s November meeting published today. Gold has tumbled 8.8 percent in December, heading for the first monthly loss since September.

Gold futures for February delivery declined 0.7 percent to settle at $1,595.50 an ounce at 1:35 p.m. on the Comex in New York, after reaching $1,591.10, the lowest price since Dec. 19.

Silver futures for March delivery retreated 1.2 percent to $28.74 an ounce on the Comex, declining for the third time in four sessions.

On the New York Mercantile Exchange, palladium futures for March delivery gained 0.1 percent to $666.6 an ounce. Platinum futures for April delivery rose 0.3 percent to $1,437.90 an ounce.

BASE METALS

Copper fell for the first time in a week as sliding U.S. home prices and Europe’s escalating debt crisis trimmed prospects for global growth and metals demand.

The S&P/Case-Shiller index of property values in 20 U.S. cities dropped 3.4 percent in the year ended Oct. 30. The median forecast of 27 economists in a Bloomberg News survey projected a 3.2 percent decrease. Italian government bonds declined before the nation prepares to auction as much as 20 billion euros ($26.2 billion) of debt in the next two days.

Copper futures for March delivery fell 1.7 percent to close at $3.409 a pound at 1:17 p.m. on the Comex in New York, the biggest loss for a most-active contract since Dec. 14 and the first since Dec. 19. The metal has slumped 23 percent this year.

LIVESTOCK

Cattle futures declined the most in two weeks on speculation that more animals will be available to U.S. meatpackers after winter storms and the holidays delayed shipments. Hogs also dropped.

Meatpackers slaughtered 598,000 cattle last week, down 6.9 percent from a week earlier, government data show. Areas in northern Texas, Colorado, western Oklahoma and Kansas got 2 inches (5.1 centimeters) to 9.8 inches of snow, according to the National Weather Service. Processors cut hours for the Christmas holiday, and winter weather hinders shipments, said Rich Nelson, the director of research at Allendale Inc. in McHenry, Illinois.

Cattle futures for February delivery fell 0.9 percent to close at $1.232 a pound at 1 p.m. on the Chicago Mercantile Exchange, the biggest drop for a most-active contract since Dec. 9. The commodity has climbed 14 percent this year, heading for the third straight annual gain.

Feeder-cattle futures for March settlement fell 0.1 percent to $1.50275 a pound on the CME. On Dec. 23, the price rose to a record $1.50575. The commodity has gained 21 percent this year.

Meatpackers processed an estimated 132,000 cattle today, 20 percent more than a week earlier, the U.S. Department of Agriculture said.

Hog futures for February settlement dropped 0.1 percent to 85.75 cents a pound. The price has advanced 7.5 percent this year, heading for a fourth straight annual gain.

To contact the reporter on this story: Mario Parker in Chicago at mparker22@bloomberg.net

To contact the editor responsible for this story: Bill Banker at bbanker@bloomberg.net

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