COMMODITIES-U.S. oil at 16-mth high; gold up on Bernanke assurance
NEW YORK, July 18 (Reuters) - Commodities mostly rose on Thursday, with U.S. crude oil hitting 16-month highs on signs of a stronger economy and gold and copper rebounding after assurances from the Federal Reserve chief that the central bank would taper its stimulus with care.
Crop prices mostly closed lower.
Chicago-traded corn and soybean futures retreated for a second straight day after forecasts for milder temperatures and slightly more rain across much of the U.S. Midwest lessened worries on crop damage.
In New York, arabica coffee turned lower after touching an almost two-month high as the trade sold into a rally prompted by cold weather forecasts in top-grower Brazil. Raw sugar rose on Brazil rain expectations.
The 19-commodity Thomson Reuters-Jefferies CRB index ended up almost 1 percent, helped largely by the rally in U.S. crude -- the index's largest component. On Wednesday, the CRB had fallen 0.2 percent.
U.S. crude, commonly referred to as West Texas Intermediate or WTI, saw its front-month contract settle up $1.56, or 1.5 percent, at $108.04 a barrel. That was the contract's highest since early March 2012.
Benchmark Brent crude out of Europe's North Sea, meanwhile, edged up 9 cents to $108.70 a barrel.
The price difference between the world's two most heavily traded crude contracts has narrowed sharply in recent weeks as increased pipeline capacity has reduced the glut of oil around the WTI delivery point of Cushing, Oklahoma.
Thursday's rally in U.S. crude came after the Philadelphia Federal Reserve's closely watched survey of factory activity in the U.S. mid-Atlantic region hit a two-year high.
"The market is rallying on good economic news," said Phil Flynn, an analyst at Price Futures Group in Chicago.
"The Dow Jones is good, the Fed's Philly index is good, employment data is good, and WTI is reflecting that right now."
In gold, the spot price of bullion rose 0.6 percent to above $1,283 an ounce by 5:30 p.m. EDT (2130 GMT), after Fed Chairman Ben Bernanke left open the option of changing the central bank's stimulus exit plans if the economic outlook grew worse.
Bernanke had earlier affirmed the Fed would likely reduce its program of buying $85 billion of bonds a month later in 2013 and halt it altogether by mid-2014.
In copper, benchmark three-month futures in London last bid at $6,900, versus Wednesday's close of $6,890.
(Reporting by Barani Krishnan; Editing by Marguerita Choy)