COMMODITIES-Oil, gold fall on doubts over Syria; soy tumbles
NEW YORK, Sept 4 (Reuters) - Commodity prices tumbled on Wednesday, with oil and gold prices pressured by uncertainties about the timing of a U.S. military strike on Syria, and a sell-off in soybeans triggered by forecast for wetter weather in the U.S. Midwest crop belt. Copper prices also fell as strong U.S. economic data reinforced expectations that the Federal Reserve will reduce its economic stimulus. Investors expect the August U.S. jobs report, due on Friday, to signal whether the economy is strong enough for the Fed to trim monthly bond buying of $85 billion. The Thomson Reuters-Jefferies CRB index, a closely-watched indicator for commodities, fell 0.9 percent by 1:30 p.m. EDT after 16 of the 19 futures markets it tracked slipped into negative territory. Oil prices weakened as it appeared that a military strike against Syria would remain limited, quelling fears of supply disruptions in the Middle East. U.S. President Barack Obama has asked U.S. lawmakers to approve his plan for a military strike against Syria for an alleged chemical weapons attack against its citizens. U.S. Senate Foreign Relations Committee members said they expected a panel vote later on Wednesday on a draft resolution for the use of military force in Syria. While Syria is not a big oil producer, investors have been worried that a strike there by Western forces may spread unrest in the Middle East and disrupt supply from a region that pumps a third of the world's crude. "You're mainly seeing a pullback on the perception that we may not strike Syria and that if we do, Congress will rein in Obama's plans," said Michael Lynch, an oil analyst and president of consultancy Strategic Energy & Economic Research Inc in Winchester, Massachusetts. "The chance of contagion appears much less reduced compared to last week." Benchmark Brent crude oil out of Europe's North Sea was down 71 cents, or 0.7 percent, at $114.97 a barrel. It had hit a six-month high above $117 last week. U.S. crude oil fell $1.30, or 1.2 percent, to $107.24 a barrel. It had raced above $112 last week, its highest level for this year. Gold's positive correlation to oil has been restored in the past few sessions, with the precious metal seen as a hedge against oil-led inflationary pressures. On Wednesday, the spot price of bullion dropped nearly 2 percent to a session low of $1,384.24 an ounce. U.S. gold futures for December delivery fell $21.80, or 1.5 percent, to 1,390.20 an ounce. In the case of soybeans, rain forecast for parts of the U.S. Midwest eased worries about eroding soy yields due to earlier, dry weather. Soybeans were also pressured by talk that top consumer China was planning to auction more of the oilseed from state reserves in coming months, dampening demand for U.S. soy imports. Soybeans for November delivery on the Chicago Board of Trade fell 35 cents, or 2.5 percent, to $13.51-3/4 per bushel, the steepest decline in nearly six weeks.
Prices at 1:40 p.m. EDT (1740 GMT)
LAST NET PCT YTD CHG CHG CHG US crude 107.17 -1.37 -1.3% 16.7% Brent crude 115.01 -0.67 -0.6% 3.5% Natural gas 3.662 -0.004 -0.1% 9.3% US gold 1390.60 -21.40 -1.5% -17.0% Gold 1390.40 -21.64 -1.5% -17.0% US Copper 3.24 -0.06 -1.8% -11.3% LME Copper 7130.00 -115.00 -1.6% -10.1% Dollar 82.172 -0.189 -0.2% 7.0% CRB 290.303 -2.486 -0.9% -1.6% US corn 495.00 -3.00 -0.6% -29.1% US soybeans 1400.00 -35.50 -2.5% -1.3% US wheat 629.00 -7.50 -1.2% -19.2% US Coffee 116.85 -0.35 -0.3% -18.7% US Cocoa 2478.00 81.00 3.4% 10.8% US Sugar 16.36 -0.11 -0.7% -16.1% US silver 23.400 -0.010 -4.0% -22.6% US platinum 1495.00 -43.20 -2.8% -2.8% US palladium 700.70 -19.60 -2.7% -0.4%