Copper Climbs on Fed Interest-Rate Pledge: Commodities at Close

The Standard & Poor’s GSCI Spot Index of 24 raw materials rose 0.5 percent to close at 664.92 at 5:17 p.m. in New York as base metals and wheat climbed.

The UBS Bloomberg CMCI index of 26 prices gained 0.6 percent to 1,606.229.

BASE METALS

Copper rose to a four-month high in New York after the Federal Reserve extended a pledge yesterday to hold interest rates near zero, potentially spurring metals demand. Tin climbed the most since September.

Borrowing costs will stay down through at least late 2014, the Fed said. It previously vowed to maintain low rates at least until the middle of next year. The central bank also said it may buy more assets to spur growth. Copper also gained as orders to draw the metal from London Metal Exchange inventories reached the highest level since May 2009, and U.S. durable-goods orders rose more than forecast last month.

On the Comex, copper futures for March delivery climbed 1.9 percent to settle at $3.9015. Earlier, the price reached $3.9105, the highest level since Sept. 19, and topped the 200- day moving average for the first time since August.

On the London Metal Exchange, copper for three-month delivery rose 2.5 percent to $8,590 a metric ton ($3.90 a pound).

Nickel, lead, zinc and aluminum climbed in London.

GRAINS, OILSEEDS

Wheat futures rose to a three-week high on signs of increasing demand from the U.S., the world’s biggest exporter, while Russian supplies decline.

U.S. exporters sold 618,700 metric tons in the week ended Jan. 19, the most since September, the Department of Agriculture said today. Shipments from Russia, which lifted an export ban on July 1, have surged to 19.5 million tons, a record for this time of year. That pace may have a “dramatic” slowdown until June as supplies ebb, the USDA has said.

On the Chicago Board of Trade, wheat futures for March delivery rose 1.9 percent to settle at $6.535 a bushel. Earlier, the price reached $6.5825, the highest level for a most- active contract since Jan. 4. The grain has climbed for six straight days, jumping 10 percent since Jan. 18.

OIL PRODUCTS

Heating oil and gasoline gained on the Federal Reserve’s pledge to maintain near-zero interest rates.

On the Nymex, February-delivery heating oil rose 3.43 cents, or 1.1 percent, to $3.0535 a gallon, the highest settlement since Jan. 12. Gasoline for February delivery rose 1.28 cents, or 0.5 percent, to $2.8466.

SOFT COMMODITIES

Cocoa futures rose, extending the longest rally in three months, on speculation that reforms in Ivory Coast, the world’s top grower, will boost production costs for exporters. Sugar and coffee also gained.

Ivory Coast is re-examining tax breaks given to cocoa exporters that grind beans in the West African nation after a group of buyers and cooperatives asked for the subsidies to be scrapped.

Cocoa for March delivery rose 1.2 percent to settle at $2,452 a metric ton on ICE Futures U.S. in New York. The price climbed for the fourth straight day, the longest rally since late October. Earlier, the commodity reached $2,474, the highest price for a most-active contract since Nov. 18.

Raw-sugar futures for March delivery rose 0.9 percent to 24.73 cents a pound. The price has climbed 6.1 percent this month.

Arabica-coffee futures for March delivery gained 1.2 percent to $2.197 a pound.

In London futures trading, cocoa and refined sugar rose, while robusta coffee declined on NYSE Liffe.

PRECIOUS METALS

Gold futures rose to a seven-week high as the Federal Reserve’s pledge to keep U.S. borrowing costs low drove the dollar down, boosting demand for precious metals as alternative assets. Silver jumped to a two-month high.

The greenback fell to the lowest in almost seven weeks against a basket of currencies. Yesterday, the Fed said that its benchmark interest rate will stay low until at least late 2014, and gold surged 2.1 percent, the most in three weeks.

On the Comex, gold futures for April delivery gained 1.6 percent to settle at $1,729.90 an ounce, the highest closing level since Dec. 7. Prices have jumped 10 percent this month, heading for the biggest January gain since 2008.

Silver futures for March delivery climbed 1.9 percent to $33.743 an ounce. Earlier, the metal reached $33.79, the highest since Nov. 17.

On the Nymex, platinum futures for April delivery advanced 2.4 percent to $1,616.80 an ounce, rising the most in more than a week. Palladium futures for March delivery climbed 0.2 percent to $694.45 an ounce.

CRUDE OIL

Oil rose on the Federal Reserve pledge and as a report showed durable goods orders in the world’s biggest crude- consuming country increased.

Futures advanced 0.3 percent as Fed Chairman Ben S. Bernanke said yesterday that policy makers are considering more bond purchases to boost growth after extending the pledge to maintain interest rates. Bookings for goods meant to last at least three years climbed 3 percent in December, data from the Commerce Department showed today.

On the Nymex, crude oil for March delivery increased 30 cents to $99.70 a barrel, the highest settlement price since Jan. 19. Prices are up 14 percent in the past year.

Brent oil for March settlement rose 98 cents, or 0.9 percent, to end the session at $110.79 a barrel on the London- based ICE Futures Europe exchange.

NATURAL GAS

Natural gas futures fell in New York for the first time in five days after a government report showed the surplus of the heating and power-plant fuel expanded to the widest level in 31 months.

Gas dropped 4.5 percent after the Energy Department said U.S. inventories were 21.4 percent above the five-year average for the week ended Jan. 20, wider than a 20.8 percent surplus reported for the prior week. Mild weather has crimped gas use during the fuel’s peak-demand season while producers pumped fuel at record rates.

On the Nymex, natural gas for February delivery fell 12.4 cents to settle at $2.605 per million British thermal units. Futures have dropped 13 percent this year and slid to $2.231 on Jan. 23, the lowest intraday price since February 2002.

LIVESTOCK

Cattle futures fell the most in four weeks on speculation that demand will ease as U.S. meatpackers lose money on beef sales. Hogs dropped to a two-week low.

About 490,000 cattle were slaughtered this week, down 3.2 percent from a week earlier, U.S. Department of Agriculture data show. Beef processors are losing about $95 per animal this week as meat prices fail to keep pace with gains in cattle, said Don Roose, the president of U.S. Commodities Inc. in West Des Moines, Iowa.

On the Chicago Mercantile Exchange, cattle futures for April delivery fell 0.9 percent to close at $1.2805 a pound, the biggest drop for a most-active contract since Dec. 27.

Yesterday, the price reached $1.29675, the highest since the commodity started trading on the CME in 1964. Futures have climbed 14 percent in the past year.

Feeder-cattle futures for March settlement declined 0.9 percent to $1.53625 a pound. Yesterday, the price climbed to a record $1.55525.

Hog futures for April settlement fell 1.6 percent to 86.8 cents a pound. Earlier, the price reached 86.425 cents, the lowest level since Jan. 12. The commodity has climbed 3 percent this month.

To contact the reporter on this story: Christine Buurma in New York at cbuurma1@bloomberg.net;

To contact the editor responsible for this story: Dan Stets at dstets@bloomberg.net

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