(Reuters is considering dropping the daily commodities wrap after March 10 and publishing the report on a discretionary basis. Please send any comments on this move to Josephine Mason at josephine.masonzthomsonreuters.com)
* Natgas loses 18 pct in 2 days; YTD gain more than halved
* Cotton down 2 pct after hitting 6-month high Monday
* Gasoline, cocoa, crude oil other major losers on Tuesday
* Lean hogs, live cattle and corn among few winners
NEW YORK, Feb 25 (Reuters) - Natural gas futures slumped for a second straight session on Tuesday, slashing year-to-date gains, while cotton prices also fell in a broad commodities selloff sparked by profit-taking. Gasoline, cocoa and crude oil were other markets that closed sharply lower for the session, losing about 1 percent each. Gainers were few. Futures of meat products and livestock such as lean hogs and live cattle rose more than 1 percent on concerns of tight supply. Corn, a base for animal feed, also rose, reversing early losses. The 19-commodity Thomson Reuters/Core Commodity Index shed 0.2 percent, retreating from its one-year high in the previous session. Natural gas lost the most, extending Monday's selloff in its worst two-day slide in 11 years, as traders abandoned the market's front-month contract before its expiry to take profit.
March natural gas on the New York Mercantile Exchange settled down 6.4 percent at $5.096 per million British thermal units, after sliding more than 10 percent earlier in the session. On Monday, the contract lost more than 11 percent, bringing cumulative declines over the two days to 18 percent. The losses cut sharply into year-to-date gains in natural gas. From a near 50 percent gain on the year early last week, natural gas is up only about 20 percent now. The front-month contract also hit a two-week bottom of $4.788 on Tuesday, after setting a five-year high of $6.493 on Monday, before the two-day selloff began.
VOLATILITY BEGETS VOLATILITY "The volatility has attracted speculators that led to more volatility," Aaron Calder, senior market analyst at Gelber & Associates, said, referring to the action in natural gas. "We had a run-up to $6.50 on some very bullish weather forecasts and then we saw selling by producers and profit taking from those holding long positions." U.S. cotton closed down more than 2 percent, its sharpest drop in a month, as speculators shed some long positions the day after the market hit six-month highs. Traders said the market, which had pierced above the 90-cent/lb mark on Monday amid fears of tight supplies in the fiber, could drop further in the near term before regaining strength. "We've been in an uptrend since November and today we broke that trendline, triggering a lot of stop-loss selling," said Jobe Moss, cotton broker at Moss Capital Management in Lubbock, Texas. "I'm bearish myself and I think this market may have very well seen its top. But the price keeps going up, so we could recover after some losses." The most-active May cotton contract on ICE Futures U.S. settled down 1.75 cents, or 2.2 percent lower, at 87.35 cents per lb. It had fallen 3 percent earlier, to a Feb. 7 low of 86.55 cents. The decline of more than 2 percent was the contract's sharpest drop in a day since Jan. 27.
Prices at 4:05 p.m. EST (2105 GMT)
LAST/ NET PCT CLOSE CHG CHG US crude 101.98 -0.84 -0.8% Brent crude 109.50 -1.14 -1.0% Natural gas 5.096 -0.349 -6.4% US gold 1343.00 4.70 0.4% Gold 1341.06 4.34 0.3% US Copper 3.26 -0.01 -0.4% LME Copper 7064.50 -12.50 -0.2% Dollar 80.157 -0.042 -0.1% CRB 301.579 -0.617 -0.2% US corn 455.75 4.25 0.9% US soybeans 1399.00 12.50 0.9% US wheat 615.00 -2.75 -0.5% US Coffee 175.65 0.05 0.0% US Cocoa 2899.00 -36.00 -1.2% US Sugar 17.34 -0.07 -0.4% US silver 21.963 21.742 1.6% US platinum 1442.60 1.20 0.0% US palladium 736.10 -6.95 -0.9%
(Editing by Matthew Lewis)