GLOBAL MARKETS-Stocks gain after U.S. presidential debate; oil drops
* Anxiety about Deutsche Bank undercuts post-U.S. debate gains
(Corrects headline to show oil little changed, not down) * Cocoa leaps from oversold levels, biggest rally in 3 weeks * Arabica coffee up before index rebalancing beginning Tues * Oil, copper end down slightly, gold edges higher * Eurozone investor sentiment offset by anxiety over US Fed * Speculation of thinner earnings on Wall Street also weigh By Barani Krishnan NEW YORK, Jan 7 Cocoa and coffee prices surged on Monday while most other commodities were little changed after strong investor sentiment in the euro zone was offset by worries that the U.S. Federal Reserve might limit its support for the economy and markets. Speculation that U.S. corporate earnings for the end of 2012 would only be modestly better than in the previous quarter also curbed demand in key industrial raw materials such as oil and copper. Agricultural markets saw better demand. In New York, cocoa futures experienced their biggest one-day jump in three weeks after hitting a technically oversold level, while arabica coffee saw buying ahead of an index rebalancing later this week. In Chicago, soybean futures rose on technical buying after four straight losing sessions pushed prices to their lowest level since mid-November last week. Corn and wheat also edged higher from near six-month lows. At the close, the Thomson Reuters-Jefferies CRB index was up 0.4 percent after 14 of the 19 markets on the commodities bellwether ended in positive territory. COCOA BIGGEST GAINER OF THE DAY Cocoa was the largest gainer, rising 2.1 percent to end New York futures trade up $47 at $2,267 a tonne. The rally was spurred by technical buying after prices hit oversold conditions on the 14-day relative strength index last week. In London trading, cocoa futures closed up 19 pounds, or 1.3 percent, at 1,451 pounds. The market dipped to 1,426 pounds earlier in the session, matching Friday's 8-1/2 month low for the benchmark second month contract. Cocoa was also boosted by expectations that the crop, mostly grown in West Africa, might see tighter supply in coming months. This year, supply of the beverage and confection material was expected to see "a small deficit, as West African production falls and grindings recover," said Macquarie analyst Kona Haque. Dealers said cocoa grindings may also recover to some extent after a weak 2012 performance, particularly in Europe. Fourth-quarter European grind data, to be issued later this month, is expected to show a year-on-year decline of up to 6 percent. ARABICA COFFEE ALSO JUMPS Arabica coffee rose on expectations of buying from an index fund rebalancing due from Tuesday. A lack of producer selling also helped coffee prices to recover from recent lows. Index funds rebalance their portfolios in early January, buying those commodities that have become underweight following poor performances during the prior year. Arabica coffee was one of the worst performing commodities in 2012, when it tumbled nearly 37 percent. "Everyone's front-running the rebalancing in coffee," said Nick Gentile, chief trader at Atlantic Capital Advisors in New Jersey. Arabica's benchmark contract in New York settled up 3.05 cents, or 2 percent, at $1.5040 per lb on ICE Futures U.S. The contract touched a low of $1.4125 a week ago after a prolonged downward slide driven by surplus supplies. "ICE arabica is expected to increase during Q1 as attention turns to the Brazilian 2013/14 'off' season, starting in the second half of the 2013 calendar year," said Andrea Thompson, an analyst at Coffee Network, part of INTL FCStone. Brazil, the world's biggest grower of coffee, has a biennial crop cycle which causes output to rise, then fall, from one year to the next with variations of up to 20 percent. A large 'on-year' crop in Brazil helped to propel world coffee production to a record 149.5 million bags in 2012/13, well above global consumption of 142.6 million, according to CoffeeNetwork. The U.S. Department of Agriculture has forecast a record 151 million bags. OIL, METALS LITTLE CHANGED In oil markets, London's benchmark Brent crude settled up 9 cents at $111.40 a barrel. Copper's three-month futures contract in London closed down 0.2 percent at $8,071 a tonne after falling almost 1 percent on Friday. Oil and copper prices fell as investors remained depressed by the possibility that the U.S. Federal Reserve might be curtailing its highly stimulative monetary policy. The Fed's December policy meeting minutes, released on Thursday, showed several officials of the central bank considering a slowdown or stop of asset purchases that investors have figured into their economic outlook. The Fed's balance sheet of nearly $3 trillion risks instability with further expansion, the officials had reasoned. On the plus-side, data on Monday showed euro zone sentiment improved for a fifth consecutive month in January to its highest in almost two years after a successful Greek bond buyback and a dip in Spanish jobless figures. The spot price of gold was down 0.5 percent at around $1,647 per ounce in late afternoon trade in New York. Prices at 3:15 p.m. EST (2015 GMT) LAST/ NET PCT CLOSE CHG CHG US crude 93.26 0.17 0.2% Brent crude 111.59 0.28 0.3% Natural gas 3.266 -0.021 -0.6% US gold 1646.30 -2.60 -0.2% Gold 1647.40 -9.05 -0.5% US Copper 367.80 -1.55 -0.4% LME Copper 8071.00 -14.00 -0.2% Dollar 80.251 -0.248 -0.3% US corn 685.50 5.25 0.8% US soybeans 1410.75 21.75 1.6% US wheat 751.25 4.00 0.5% US Coffee 150.40 3.05 2.1% US Cocoa 2267.00 47.00 2.1% US Sugar 18.86 0.01 0.1% US silver 30.082 0.136 0.5% US platinum 1553.80 -1.40 -0.1% US palladium 670.00 -18.50 -2.7% (Editing by Nick Zieminski)
* Anxiety about Deutsche Bank undercuts post-U.S. debate gains
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