COMMODITIES-Grains head for prolonged rally; platinum up 7th day
* Soy at 3-week high, corn hits 5-week peak before retracing
* Platinum up for 7th straight day
* Sugar dips on Brazil crop; cocoa down ahead of grind data
NEW YORK, Jan 16 (Reuters) - Fear of dry weather drove soybean and corn prices to multi-week highs on Wednesday, setting up what could be another prolonged rally in U.S. agricultural markets after last summer's bumper run. Platinum extended gains too, running up for a seventh day and deep into overbought territory. Most soft commodities fell, bucking the broadly higher trend. Improving sugar crops in top producer Brazil prompted farmers to sell, while cocoa dipped on expectations of bearish grind data out of North America. The dollar was flat against a basket of major currencies , holding little sway over commodities for a second session in a row. The 19-commodity Thomson Reuters-Jefferies CRB index settled slightly higher after the run-up in soybeans, cotton crude oil and gasoline were offset , nickel and copper.
DRY WEATHER UNDERPINS GRAINS Soybeans rose by 1.7 percent on the Chicago Board of Trade, closing up for the third time in four sessions, as dry weather in South America and the United States stoked fears that the slimmest grain stocks in six years could tighten further. "Let's face it, we need some rain," said Jack Scoville, grains analyst at The Price Group in Chicago. CBOT soybeans for March settled up 23 cents at $14.36-1/2 a bushel, after racing to $14.39 -- the highest price since Dec. 26 for a front-month soy contract. The rally in soybeans propelled corn to a 5-week high. Corn's benchmark contract on the CBOT rose 4.5 cents to $7.35 a bushel before closing just 3/4 cent higher at $7.31-1/4 as a bearish report on ethanol pared gains. The U.S. Energy Information Administration pegged the ethanol grind last week at 784,000 bushels per day, the lowest level since the agency started releasing weekly data in June 2010. Corn is the feedstock for ethanol. Corn has rallied on the USDA's forecast for the tightest global ending corn stocks since the 2006/07 marketing season. Front-month wheat settled up 2-1/4 cents at $7.82 per bushel. The market expects the smallest global wheat supplies in four years, and forecasts call for continued dry conditions in the U.S. Plains states that grow most of the country's wheat. "The dry weather is a worry in the U.S. Plains and in South America, particularly Argentina, where delays to plantings could have a negative impact on both corn and soybean production," said Rabobank analyst Erin FitzPatrick. Soybeans and wheat were the biggest gainers among commodities in 2012, rising 18 percent or more, after the worst U.S. drought in half a century wiped out a huge swathe of crops during the summer. Inclement weather in major wheat exporters from Russia to Argentina also created supply tensions.
SHORTAGE FEARS DRIVE PLATINUM Platinum rose for a seventh straight session, as hedge funds bought aggressively, fearing tight supplies after a mine labor crisis at the world's largest platinum producer in South Africa. The price of platinum stayed above that of gold for a second straight day when Anglo American Platinum in South Africa said it would shut two mines and cut 14,000 jobs. The move is expected to widen the platinum market's deficit in 2013 in an already tight market due to strong autocatalyst demand. Buying by momentum-driven hedge funds and money managers has fueled platinum's 9 percent rally in the past seven sessions, sending the market deeper into an overbought territory. The U.S. EFTS Platinum Trust also posted an increase in its platinum holdings so far in January. Spot platinum rose 0.4 percent to $1,685.52 an ounce $1,699.50 set on Tuesday.
Prices at 6:01 p.m. EST (2301 GMT)
LAST/ NET PCT YTD CLOSE CHG CHG CHG US crude 94.15 -0.09 -0.1% 2.5% Brent crude 110.60 0.30 0.3% -0.5% Natural gas 3.435 0.000 0.0% 2.5%US gold 1683.20 -0.70 0.0% 0.4% Gold 1679.59 0.70 0.0% 0.3% US Copper 360.65 -3.10 -0.9% -1.3% LME Copper 7946.00 -48.00 -0.6% 0.2% Dollar 79.809 0.030 0.0% 4.0%US corn 731.25 0.75 0.1% 4.7% US soybeans 1436.50 23.00 1.6% 1.3% US wheat 785.00 2.25 0.3% 0.9%US Coffee 153.00 0.50 0.3% 6.4% US Cocoa 2256.00 -14.00 -0.6% 0.9% US Sugar 18.45 -0.17 -0.9% -5.4%US silver 31.542 0.013 0.0% 4.4% US platinum 1692.20 4.20 0.2% 10.0% US palladium 726.45 13.10 1.8% 3.3%