COMMODITIES-Broad rally; cotton at 5-mth high, sugar up off lows

Barani Krishnan
Thursday, 16 Jan 2014 | 5:59 PM ET

NEW YORK, Jan 16 (Reuters) - U.S. commodity markets rose broadly on Thursday with cotton futures hitting five-month highs on strong export sales and raw sugar rebounding from a mid 2010 low on short-covering. Natural gas joined the run-up, resuming its bullish streak after a respite on Wednesday. Nickel was also up, shooting to a 2-1/2 month high on persistent concerns about an Indonesian ban on exports of unprocessed ores. The Thomson Reuters/Core Commodity Index, a sector bellwether, rose 0.2 percent after gains in 13 of the 19 commodities it tracked. Gasoline was one of the few decliners on the CRB, falling 1.2 percent on selling stemming from the previous day's report that fuel usage was down during a recent cold snap. Cotton had the biggest gain of the day, surging 1.7 percent after strong U.S. weekly export sales data reinforced worries over tight supplies in the world's top exporter, even as global inventories swell. The benchmark March cotton contract on ICE Futures U.S. closed up 1.4 cents at 86.19 cents a lb after surging to 86.67 cents a lb, the highest for a spot cotton contract since August. U.S. government data on Thursday showed U.S. exporters sold 223,700 running bales in the week ending Jan. 9, up from 68,100 bales the previous week during the New Year's holiday lull.

Traders noted that U.S. exports this season will beat the 10.5 million 480-lb bales forecast by the USDA, if sales continue at this pace. "We saw some very good export sales, above market expectations. That's alleviating some of the worries over the big Chinese stockpile situation," said Sterling Smith, a futures specialist with Citigroup in Chicago. Global inventories are expected to balloon to 97.6 million 480-lb bales by the end of the 2013/14 crop year end-July, on the back of a government stockpiling program in top consumer China. Raw sugar rose 1.4 percent as traders covered short positions after prices held above the support level of 15 cents/lb. March raw sugar futures on ICE closed up 0.22 cent, or 1.4 percent, at 15.45 cents a lb, after touching a 3-1/2-year low of 15.10 cents a lb earlier in the session. Still, sugar traders braced for a long-term bear market as abundant global supplies have brought prices down around 25 percent from the one-year high they hit in October. "It seems the sugar market is all 'doom and gloom' at the moment, at least for producers who see their future crops diminish in value and for traders long of physical inventory and unable to place their sugar despite the sharp drop in prices," Nick Penney, senior trader at Sucden Financial Sugar in London, wrote in a commentary. "The only thing we see on the horizon to support prices is the fact that so many are bearish (and therefore, we assume, already short)," Penney wrote. Prices at 5:45 p.m. EDT (2245 GMT)

LAST/ NET PCT CLOSE CHG CHG Brent crude 107.06 -0.07 -0.1% Natural gas 4.382 0.000 0.0% US gold 1240.20 1.90 0.2% Gold 1241.99 -0.10 0.0% US Copper 3.34 -0.02 -0.5% LME Copper 7310.00 -42.50 -0.6% Dollar 80.928 -0.099 -0.1% CRB 278.416 0.571 0.2% US corn 428.00 2.25 0.5% US soybeans 1315.00 -3.50 -0.3% US wheat 572.75 5.00 0.9% US Coffee 118.35 1.15 1.0% US Cocoa 2753.00 5.00 0.2% US Sugar 15.45 0.22 1.4% US silver 20.054 19.853 1.6% US platinum 1430.00 2.90 0.0% US palladium 743.90 -0.10 0.0%

(Editing by David Gregorio)