NEW YORK: Commodities saw their biggest one-day loss in two weeks on Monday, March 28 as oil, metals and grains markets slumped amid worsening prospects for demand after last month's big price run-up.
U.S. crude closed down more than 1 percent in the lowest trading volume of the year as Libyan rebels regained key territory and redoubled efforts to resume oil exports from the OPEC country.
Copper prices fell almost 2 percent as concerns about sustained softness in Chinese buying and rising inventory levels continued to hold back investments in the metal.
On the agricultural side, corn futures fell nearly 3 percent, pulling down soybean and wheat futures too, due to the absence of confirmation for a rumored shipment of corn to China. Sugar fell about 3 percent as top producer Brazil began harvest.
The combined losses drove the Reuters-Jefferies CRB index, which tracks a total of 19 mostly-U.S. traded commodities, down 1.3 percent -- marking the biggest one-day drop for the index since March 15.
"I don't expect to see any notable improvement in investment demand until physical demand shows some signs of improvement," said Catherine Virga, a senior analyst for base metals at New York's CPM Group.
Commodities, particularly oil, had a strong run through February and early March after unrest in Libya shut down its oil exports. Energy supplies from elsewhere in the Middle East and North Africa were also threatened by strife that spread from Yemen to Bahrain.
But Japan's recent earthquake -- and resultant nuclear crisis -- had raised questions on whether the Asian region would break in the near term from its runaway growth which had supported much of the bullish outlook for commodities.
"There are questions about how strong demand from China will be," said Edward Meir, another metals analyst at New York's MF Global, who also follows crude oil. "Out of China, you just don't hear anything positive.
Crude oil's benchmark front-month contract in New York closed lower for a third straight day, settling down $1.42 at $103.98 per barrel.
Total U.S. crude volume was 58 percent below the 30-day average. At 348,370 lots traded by the end of regular market hours, volume was on pace to be the lowest since Dec. 31, according to Reuters data.
In London, Brent oil's benchmark contract settled down 79 cents at $114.80 a barrel. Brent's trading volume was 48 percent below the 30-day average.
In copper, the London Metal Exchange's benchmark copper contract closed down $150 at $9,535 a tonne, its largest daily decline since March 9. In New York, copper's most active contract, May, shed 6.90 cents, or 1.6 percent, to settle at $4.35 per lb.
Since hitting record highs at $10,190 per tonne in London and $4.6575 per lb in New York last month, copper has fallen as much as 12 percent, settling into an aimless range over the last few sessions.
U.S. corn for May delivery fell 18-1/2 cents, or 2.7 percent, to $6.71 per bushel on the Chicago Board of Trade.
Corn trading volume of about 277,000 contracts was down 24 percent from the 30-day average, according to Reuters data.
In sugar, the raw version of the commodity fell 0.81 cent, or about 3 percent, to finish at 27.05 cents per lb for the May contract in New York. Refined white sugar in London closed down $10.20 at $701.60 per tonne. - Reuters
U.S. crude closed down more than 1 percent in the lowest trading volume of the year as Libyan rebels regained key territory and redoubled efforts to resume oil exports from the OPEC country.
Copper prices fell almost 2 percent as concerns about sustained softness in Chinese buying and rising inventory levels continued to hold back investments in the metal.
On the agricultural side, corn futures fell nearly 3 percent, pulling down soybean and wheat futures too, due to the absence of confirmation for a rumored shipment of corn to China. Sugar fell about 3 percent as top producer Brazil began harvest.
The combined losses drove the Reuters-Jefferies CRB index, which tracks a total of 19 mostly-U.S. traded commodities, down 1.3 percent -- marking the biggest one-day drop for the index since March 15.
"I don't expect to see any notable improvement in investment demand until physical demand shows some signs of improvement," said Catherine Virga, a senior analyst for base metals at New York's CPM Group.
Commodities, particularly oil, had a strong run through February and early March after unrest in Libya shut down its oil exports. Energy supplies from elsewhere in the Middle East and North Africa were also threatened by strife that spread from Yemen to Bahrain.
But Japan's recent earthquake -- and resultant nuclear crisis -- had raised questions on whether the Asian region would break in the near term from its runaway growth which had supported much of the bullish outlook for commodities.
"There are questions about how strong demand from China will be," said Edward Meir, another metals analyst at New York's MF Global, who also follows crude oil. "Out of China, you just don't hear anything positive.
Crude oil's benchmark front-month contract in New York closed lower for a third straight day, settling down $1.42 at $103.98 per barrel.
Total U.S. crude volume was 58 percent below the 30-day average. At 348,370 lots traded by the end of regular market hours, volume was on pace to be the lowest since Dec. 31, according to Reuters data.
In London, Brent oil's benchmark contract settled down 79 cents at $114.80 a barrel. Brent's trading volume was 48 percent below the 30-day average.
In copper, the London Metal Exchange's benchmark copper contract closed down $150 at $9,535 a tonne, its largest daily decline since March 9. In New York, copper's most active contract, May, shed 6.90 cents, or 1.6 percent, to settle at $4.35 per lb.
Since hitting record highs at $10,190 per tonne in London and $4.6575 per lb in New York last month, copper has fallen as much as 12 percent, settling into an aimless range over the last few sessions.
U.S. corn for May delivery fell 18-1/2 cents, or 2.7 percent, to $6.71 per bushel on the Chicago Board of Trade.
Corn trading volume of about 277,000 contracts was down 24 percent from the 30-day average, according to Reuters data.
In sugar, the raw version of the commodity fell 0.81 cent, or about 3 percent, to finish at 27.05 cents per lb for the May contract in New York. Refined white sugar in London closed down $10.20 at $701.60 per tonne. - Reuters
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