* CRB index hits 7-1/2 month bottom
* Brent oil down more than half pct on the year
* Copper trades below $7,652/ton, a 3-month low
* Cocoa, sugar down nearly 3 pct each; gold joins slide
By Barani Krishnan
NEW YORK, March 1 Commodities tumbled on Friday,
with oil entering negative territory for the year and copper
hitting a three-month low, after U.S. budget cuts and a surging
dollar triggered worries about raw materials demand.
Cocoa and sugar were among other commodities
that fell sharply, losing nearly 3 percent each, after data
showing weakness in European manufacturing and cooling growth in
The Thomson Reuters-Jefferies CRB index, the
commodities bellwether, fell nearly 1 percent, to a 7-1/2 month
low. Orange juice tumbled the most among the CRB's 19
components, losing 5 percent.
The sell-off was sparked by market jitters related to the
political gridlock over the U.S. budget, where rival Democrats
and Republicans set off $85 billion in automatic spending cuts
known as "sequestration".
The International Monetary Fund has warned that the cuts
could knock at least 0.5 percentage points off U.S. economic
growth this year and weigh on the rest of the global economy.
"Despite some green shoots in the United States, the growth
forecast remains mediocre, unemployment stubbornly high and
economic data inconsistent," oil brokerage PVM said in a note to
The strong dollar was another factor discouraging those
holding other currencies like the euro and yen from buying
dollar-denominated commodities. The euro fell to a 2013
low while the dollar itself hit a 6-month high against a basket
of major currencies.
GOLD JOINS OIL, METALS SLIDE
In oil, benchmark Brent crude traded in London
closed down 98 cents, or almost 1 percent, at $110.40 a barrel.
It fell to a six-week low below $110 during the session.
Brent has dropped more than $9 a barrel over the last three
weeks since it hit a nine-month high of $119.20. It is now down
0.6 percent for the year.
U.S. crude settled down 1.5 percent at $90.68 per
barrel, after hitting a low of $90.44 earlier in the session,
its weakest since December.
Copper fell to its lowest in more than three months after
data from top metals importer China showed slowing factory
Three-month copper traded in London touched its
lowest since November last year at $7,652 a tonne, and ended
down at $7,700, versus a closing bid of $7,815 on Thursday.
Prices fell more than 4 percent in February.
Tin, nickel, zinc, lead and aluminium prices all hit
Gold also fell, posting its third straight weekly decline
and debunking the precious metal's reputation as a safe haven
versus other commodities and assets.
Spot gold XAU= was down 0.3 percent to $1,575.26 an ounce by
3:00 p.m. ET (2000 GMT). U.S. gold futures GCJ3 for April
delivery settled down $5.80 at $1,572.30.
Prices at 3:14 p.m. EST (2014 GMT)
LAST/ NET PCT YTD
CLOSE CHG CHG CHG
US crude 90.92 -1.14 -1.2% -1.0%
Brent crude 110.54 -0.84 -0.8% -0.5%
Natural gas 3.456 -0.030 -0.9% 3.1%
US gold 1572.30 -5.80 -0.4% -6.2%
Gold 1575.36 -4.16 -0.3% -5.9%
US Copper 348.15 -4.60 -1.3% -4.7%
LME Copper 7703.00 -112.00 -1.4% -2.9%
Dollar 82.305 0.356 0.4% 7.2%
US corn 724.00 4.50 0.6% 3.7%
US soybeans 1464.50 -9.75 -0.7% 3.2%
US wheat 713.25 5.50 0.8% -8.3%
US Coffee 143.35 0.15 0.1% -0.3%
US Cocoa 2082.00 -53.00 -2.5% -6.9%
US Sugar 17.91 -0.48 -2.6% -8.2%
US silver 28.490 0.058 0.2% -5.7%
US platinum 1573.50 -10.00 -0.6% 2.3%
US palladium 720.40 -14.15 -1.9% 2.4%