Commodities jumped to a two-week high as U.S. private-sector job growth and expanding Chinese and European manufacturing bolstered optimism in the global economy.
The Reuters/Jefferies CRB Index of 19 raw materials jumped 2.5 percent to settle at 308.91 at 5:34 p.m. New York time, the highest level since Nov. 12. Grains and industrial prices led the rally. Wheat soared as much as 7.9 percent, and cotton rose more than 3 percent. Copper gained the most in almost four weeks and crude oil added 3.1 percent.
“The U.S. has certainly emerged from the slowdown,” said James Paulsen, chief investment strategist at Wells Capital Management, which manages about $350 billion. “Most of the emerging world, including China, is still accelerating. Commodities will continue to do well.”
U.S. companies added 93,000 jobs in November, ADP Employer Services said. That topped the 70,000 median estimate of 40 economists surveyed by Bloomberg News. China’s manufacturing expanded at the fastest pace in seven months, while Europe’s grew the most in four months.
“Acceleration in the economic growth will probably impact the industrial-commodity prices the most,” Paulsen said. “Energy and industrial commodities are going to lead the way next year.”
The CRB index has climbed 21 percent since July 1 as the U.S. moved to bolster growth.
Wheat futures in Chicago posted the biggest gain in seven weeks as excessive rainfall threatened to reduce grain quality and delay the harvest in Australia.
Cotton climbed the most allowed by ICE Futures U.S. after India, the world’s second-largest grower, announced yarn-export limits.
Corn rose as much as 4.3 percent on speculation that China will increase imports of agricultural goods to damp inflation.
Among CRB components, only cocoa and hogs posted a decline.