COMMODITIES-Metals, energy drop as dollar gains on Yellen nomination
NEW YORK, Oct 9 (Reuters) - Nearly all commodity markets fell on Wednesday, with metal and energy components among the biggest losers as the dollar bounced up off an eight-month low after news that Janet Yellen would soon be nominated for the top Federal Reserve post. The Thomson Reuters-Jefferies CRB gauge slid 0.87 percent, with 17 of the 19 commodity markets in the bellwether index, ending lower. Just corn and coffee posted modest gains. Gold futures settled about 1 percent lower after sliding 1.5 percent to a one-week low during the session, as the dollar rose following news that Fed Vice Chair Yellen would be nominated as the next chief of the U.S. central bank, which removed some uncertainty in financial markets. U.S. President Barack Obama nominated Yellen late in the New York session. If confirmed by the U.S. Senate, she will replace Ben Bernanke, whose second term as Fed chairman ends on Jan. 31.
Also in the afternoon, minutes from the Fed's September meeting revealed the decision to maintain stimulus was a "close call," suggesting broad support remained to cut bond-buying this year. The dollar added to its gains and bullion cut some losses in light volume. Many gold buyers kept to the sideline, due to anxiety over how the debt stand-off in Washington will play out, as a U.S. government shutdown continues. "This lack of response to the U.S. shutdown may mask an underlying negative investor sentiment," said James Steel, chief precious metals analyst at HSBC. "At the very least gold's safe-haven bid is lacking." Spot gold was down 1.02 percent at $1,304.69 an ounce $1,294.04. U.S. gold futures GCZ3 for December delivery settled down $17.40 an ounce to $1,307.20. Global oil prices dropped after a report showing the largest weekly buildup of U.S. crude stocks in a year weighed further on a market already concerned that a budget impasse in Washington would curb demand in the world's biggest oil consumer. The dollar's rise also pressured crude prices. Data from the U.S. Energy Information Administration (EIA) showed U.S. crude inventories shot up nearly 7 million barrels last week, their largest weekly gain since September 2012, and well above forecasts. Brent crude settled $1.66 lower at $108.50 a barrel, for a 1 percent decline. U.S. oil ended down $1.88 at $101.61 per barrel, a 1.82 percent loss. "I don't think anyone was looking for that big of an increase. We have higher production (in the United States) and imports were far more than we need," said Andy Lebow, vice president at Jefferies Bache in New York. Copper dropped to its lowest in three weeks on the dollar rise and as the U.S. fiscal deadlock eroded appetite for risk-associated assets. Benchmark three-month copper closed ring trading down 1.9 percent at $7,100 per tonne.
In Chicago, U.S. corn futures rose in reaction to firm export demand and to traders exiting bearish bets as the feed grain traded near three-year lows. Soybean futures were pressures from the ongoing U.S. harvest, while a mild round of profit-taking pushed wheat prices beneath a 3-1/2 month high. Volume in all three markets was squelched by the partial shutdown of the U.S. federal government as the U.S. Agriculture Department was not issuing its regular supply/demand reports. Cocoa futures hit a 13-month high before finishing lower. It had been lifted by expectations that a rise in European third-quarter grind data due this week would show firm demand.
Prices at 4:01 p.m. EDT (2001 GMT)
LAST/ NET PCT YTD CLOSE CHG CHG CHG US crude 101.42 -2.07 -2.0% 10.5% Brent crude 108.91 -1.25 -1.1% -2.0% Natural gas 3.679 -0.037 -1.0% 9.8% US gold 1307.20 -17.40 -1.3% -22.0% Gold 1305.16 -13.14 -1.0% -22.0% US Copper 3.22 -0.06 -1.8% -11.8% LME Copper 7099.50 -140.00 -1.9% -10.5% Dollar 80.365 0.304 0.4% 4.7% CRB 285.504 -2.501 -0.9% -3.2% US corn 443.50 2.00 0.5% -36.5% US soybeans 1287.75 -1.00 -0.1% -9.2% US wheat 690.50 -3.00 -0.4% -11.2% US Coffee 115.25 0.20 0.2% -19.9% US Cocoa 2703.00 -15.00 -0.6% 20.9% US Sugar 18.59 -0.03 -0.2% -4.7% US silver 21.846 21.622 1.6% -27.7% US platinum 1379.50 -20.70 0.0% -10.3% US palladium 703.10 -10.80 -1.5% 0.0%