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COMMODITIES-Fresh optimism over Fed, Cyprus helps snap 2-day loss
March 20, 2013 / 10:38 PM / 5 years ago

COMMODITIES-Fresh optimism over Fed, Cyprus helps snap 2-day loss

* Fed's pledge for continued stimulus drives rebound
    * Cyprus' move to seek new bailout plan also helps
    * Brent crude and copper up about 1 pct each
    * Wheat at 3-week high, corn at 7-week peak

    By Barani Krishnan
    NEW YORK, March 20 (Reuters) - Commodities rallied on
Wednesday as the U.S. central bank's assurance of continued
stimulus for markets and an easing of worries over Cyprus drove
oil, metals and crop prices higher, snapping two days of losses.
    The dollar's retreat from a four-month high against the euro
 also made commodities priced in the greenback more
attractive to holders of the single European currency. 
    Oil's benchmark Brent crude futures rose 1 percent
in London trading, rebounding from a three-month low. 
    Copper futures also gained about 1 percent in London
as some buyers saw a bargain for the metal that hit a
seven-month low on Tuesday. Some closed out short positions they
had on copper, as comments gathered pace this week that the
metal was probably oversold. 
    In Chicago's grain markets, wheat futures rose to a
three-week high on brisk demand from feeders and exporters. Corn
futures hit a six-week high, buoyed by tight stockpiles,
slow farmer sales and a strong physical market. 
    Among other crop futures in New York, cocoa jumped
more than 2 percent while arabica coffee rose almost half
a percent to close up for the first time in eight sessions.
    The Thomson Reuters-Jefferies CRB index, a
closely-watched indicator for commodities, ended up 0.6 percent,
after losing 1.2 percent in two earlier sessions combined.
Twelve of the 19 markets tracked by the index rose.
    Gold was one of the few markets that ended down, as
safe-haven demand for bullion weakened with the improved market
    The broad rally was powered by the U.S. Federal Reserve's
pledge to continue buying $85 billion in mortgage and Treasury
bonds a month despite growing concerns about the risks the
purchases could pose. The Fed said unemployment remains too high
and fiscal policy has become somewhat "more restrictive," likely
referring to hefty spending cuts by the U.S. government.
    In Cyprus's case, it bought more time to come up with a
rescue plans for its banks by ordering them to stay shut until
next week as the government scrambled to put together a new
bailout proposal after rejecting the conditional offer set forth
by the European Union. 
    The uncertainty about Cyprus's finances has revived concern
about the stability of the euro zone and of the downside risks
to global economic growth.  
    "Clearly, market players anticipate that an alternative
solution will be found for Cyprus," said Carsten Fritsch, an oil
analyst at Commerzbank in Frankfurt.
    Brent crude rose $1.27 to settle at $108.72 a
barrel. It had dropped nearly 2 percent to a three-month low on
    U.S. crude's front-month contract rose 80 cents to
$92.96 per barrel.
    In metals, three-month copper on the London Metal Exchange
 closed up $90 at $7,620 a tonne. It had fallen to a
seven-month low of $7,486.25 on Tuesday.
    Aluminum closed at $1,939 a tonne from $1,936.50 in
the previous session.
    The spot price of gold was down 0.4 percent at below
$1,606 per ounce.
 Prices at 6:13 p.m. EST (2213 GMT)      
                             LAST/      NET    PCT     YTD
                             CLOSE      CHG    CHG     CHG
 US crude                    93.45    -0.05  -0.1%    1.8%
 Brent crude                108.58     1.13   1.1%   -2.3%
 Natural gas                 3.960    0.000   0.0%   18.2%
 US gold                   1607.50    -3.80  -0.2%   -4.1%
 Gold                      1606.08     0.19   0.0%   -4.1%
 US Copper                  343.55     4.00   1.2%   -5.9%
 LME Copper                7620.00    90.00   1.2%   -3.9%
 Dollar                     82.838   -0.151  -0.2%    7.9%
 US corn                    732.50     4.00   0.6%    4.9%
 US soybeans               1419.75    13.00   0.9%    0.1%
 US wheat                   736.00    14.00   1.9%   -5.4%
 US Coffee                  133.60     0.50   0.4%   -7.1%
 US Cocoa                  2152.00    53.00   2.5%   -3.8%
 US Sugar                    18.35     0.04   0.2%   -5.9%
 US silver                  28.817   -0.026  -0.1%   -4.7%
 US platinum               1582.50    27.10   1.7%    2.8%
 US palladium               758.20    23.00   3.1%    7.8%

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