Metals, Coffee Fall on Slowing Economies: Commodities at Close

The Standard & Poor’s GSCI Spot Index of 24 raw materials fell by the most this year, dropping 1.5 percent to 692.61 on signs that slowing global economies will erode demand for raw materials. Coffee, lead and zinc led the decline.

The UBS Bloomberg CMCI index of 26 prices slumped 1.6 percent to 1,611.433.

SOFT COMMODITIES

Coffee futures in New York tumbled to a 16-month low on signs that sales by Brazilian producers increased amid a commodity slump triggered by a contraction in Europe’s economy.

Prices fell as a report showed Europe’s economy shrank 0.3 percent last quarter. The dollar rose against the real, spurring coffee sales by growers in Brazil, the world’s biggest exporter, said Hernando de la Roche of INTL FCStone in Miami. Inventories of the commodity monitored by ICE Futures U.S. have climbed 24 percent since the end of the third quarter.

Arabica-coffee futures for May delivery tumbled 4.3 percent to settle at $1.9305 a pound at 2 p.m. on ICE Futures U.S. in New York, the biggest decline since Oct. 25. Earlier, the price touched $1.9255, the lowest level for a most-active contract since Oct. 20, 2010.

Sugar futures fell the most in three weeks on mounting concern that stockpiles will outpace demand amid faltering global economies. Cocoa was unchanged.

Sugar supplies will exceed demand by 7.7 million metric tons in the 12 months ending Sept. 30, up 1.6 million tons from a November forecast, according to London-based Czarnikow Group Ltd., which traded the sweetener in more than 90 countries last year.

Raw-sugar futures for May delivery slid 2.6 percent to settle at 24.05 cents a pound at 2 p.m. on ICE Futures U.S. in New York, marking the biggest drop for a most-active contract since Feb. 9. Still, the price is up 3.2 percent this year.

Cocoa futures for May delivery closed steady at $2,283 a metric ton.

In London futures trading, refined sugar sank, while cocoa was higher on NYSE Liffe.

BASE METALS

Copper posted the biggest drop in almost 12 weeks as a report that showed European economies contracted fueled concerns that raw-material demand will ebb.

Gross domestic product in the 17-nation euro area dropped 0.3 percent in the fourth quarter from the third, European Union data showed. U.K. retail sales slid for the second straight month in February. China, the world’s biggest metal consumer, yesterday cut its economic-growth target.

Copper futures for May delivery declined 3.2 percent to settle at $3.7375 a pound at 1:20 p.m. on the Comex in New York, the largest drop for a most-active contract since Dec. 14. The metal has climbed 8.8 percent this year.

On the London Metal Exchange, copper for delivery in three months fell 2.5 percent to $8,289.50 a metric ton ($3.76 a pound).

Nickel, tin, aluminum, zinc and lead also slid on the LME. A gauge of the six industrial metals on the exchange declined 2.6 percent, the most since Feb. 10. The measure has climbed 8.5 percent this year.

LIVESTOCK

Cattle futures dropped the most since early December on signs that U.S. beef demand is slowing after prices rallied. Hogs fell the most since June.

Cattle futures for April delivery dropped 2 percent to settle at $1.25775 a pound at 1 p.m. on the Chicago Mercantile Exchange, the biggest decline since Dec. 5.

Feeder-cattle futures for April settlement fell 1.8 percent to $1.56125 a pound in Chicago.

Hog futures for April settlement sank 3 percent to settle at 86.775 cents a pound on the CME, the biggest loss since June 27. The commodity has gained 2.9 percent this year.

PRECIOUS METALS

Gold and silver futures slumped to five-week lows as the dollar’s rally eroded demand for precious metals as alternative investments. Palladium and platinum dropped the most since December.

The greenback rose to a two-week high against a basket of currencies. Europe’s economy contracted in the fourth quarter, and Richard Fisher, the president of the Federal Reserve Bank of Dallas, said yesterday that he opposes more purchases of securities by the central bank, damping expectations for additional stimulus.

On the Comex in New York, gold futures for April delivery fell 1.9 percent to settle at $1,672.10 an ounce at 1:45 p.m. Gold closed below the 200-day moving average, a bearish signal to some investors who study price charts.

Silver futures for May delivery fell 2.7 percent to $32.783 an ounce on the Comex.

On the New York Mercantile Exchange, palladium futures for June delivery slumped 5 percent at $671.60 an ounce, the biggest drop since Dec. 14. Platinum futures for April delivery slid 3 percent to $1,611.90 an ounce, the largest decline since Dec. 28.

GRAINS, OILSEEDS

Corn fell the most in two weeks on speculation that China won’t boost imports from the U.S. after the country harvested a record crop last year. Soybeans rose.

China, the world’s second-biggest corn user, won’t require “large imports” this year as the country has ample supplies, the State Administration of Grain said. Prices touched the highest in almost four months yesterday after the nation’s top maker of livestock feed said China should reform its corn-import system by dropping quotas.

Today’s decline goes “back to the Chinese comments that they’re not going to need corn this year,” Brian Grete, the senior market analyst for Professional Farmers of America newsletter in Cedar Falls, Iowa, said in a telephone interview.

Corn futures for May delivery fell 1 percent to settle at $6.54 a bushel at 1:15 p.m. on the Chicago Board of Trade, the biggest drop since Feb. 21. Yesterday, the price climbed to $6.6525, the highest since Nov. 9.

Soybean futures for May delivery advanced 0.8 percent to $13.3525 a bushel on the CBOT. The oilseed has gained 11 percent this year on increasing Chinese imports and as hot, dry weather threatened South American crops.

Areas of Brazil may be mostly dry through March 9, while showers brought as much as 2.5 inches (6.4 centimeters) of rain to parts of Argentina in the past 24 hours and more moisture may arrive March 8, Telvent DTN forecast.

Wheat futures declined the most in three weeks as beneficial rains in the U.S. Great Plains boost prospects for winter crops emerging from dormancy.

Wheat for May delivery dropped 2.1 percent to settle at $6.5775 a bushel at 1:15 p.m. on the Chicago Board of Trade, the biggest decline for a most-active contract since Feb. 10.

CRUDE OIL

Oil dropped to a two-week low in New York as the European Union offered to restart negotiations with Iran over its nuclear program, reducing the specter of war in the Middle East, source of 30 percent of the world’s crude.

Futures fell 1.9 percent after Catherine Ashton, the EU’s foreign-policy chief, issued a statement on behalf of China, France, Germany, Russia, the U.K. and the U.S. urging Iran’s nuclear envoy to meet to seek an accord. Commodities also declined as the euro-area economy contracted and on concern that a Greek swap deal will fail.

Crude for April delivery fell $2.02 to $104.70 a barrel on the New York Mercantile Exchange, the lowest settlement since Feb. 17. Futures are up 5.9 percent this year.

Brent oil for April settlement declined $1.82, or 1.5 percent, to end the session at $121.98 a barrel on the London- based ICE Futures Europe exchange.

OIL PRODUCTS

Gasoline slid for a third consecutive day on concern that global growth is slowing after a report that Europe’s economy contracted in the fourth quarter.

Futures fell as Europe’s gross domestic product shrank 0.3 percent from the third quarter, the European Union’s statistics office said today. This follows reports yesterday that U.S. factory orders sank and China cut its economic growth outlook.

Gasoline for April delivery declined 2.81 cents, or 0.9 percent, to settle at $3.2299 a gallon on the New York Mercantile Exchange. Prices have gained 20 percent this year, making gasoline the best-performing energy commodity in the Standard & Poor’s GSCI index of 24 raw materials.

April-delivery heating oil fell 2.92 cents, or 0.9 percent, to settle at $3.1882 a gallon on the exchange. Prices are up 8.6 percent this year.

NATURAL GAS

Natural gas futures were steady near a six-week low in New York as forecasts for warmer-than-usual weather across most of the U.S. over the next two weeks signaled reduced demand for the heating and power-plant fuel.

Gas has dropped 21 percent this year, making it the worst performer on the Standard & Poor’s GSCI commodity index. Temperatures in most of the lower 48 states will be above normal from March 10 through March 15, according to the National Weather Service. Mild weather this winter and higher gas production have contributed to a growing gas surplus.

Natural gas for April delivery rose 0.1 cent to settle at $2.356 per million British thermal units on the New York Mercantile Exchange. Prices settled at a six-week low yesterday. The price discount, or spread, of the April contract to May futures narrowed by 1.1 cents to 10.6 cents.

To contact the reporter on this story: Lynn Doan in San Francisco at ldoan6@bloomberg.net

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

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