NEW YORK: A number of commodities were higher for a second straight session on Monday on hopes that a recovering US economy will lead to better demand, while coffee, sugar and corn rallied on worries about harsh weather and supply tightness.
A fresh record high on the Dow Jones industrial average for US stocks added support across the sector.
The dollar fell against the euro, but remained near a 3-1/2-year high against the yen on speculation that the rebounding US labor market could prompt the US Federal Reserve to retreat sooner than expected from its ultra-loose monetary policy.
The energy and metals markets, however, traded more on the bullish US job numbers for February, released on Friday, ending broadly up or off the lows of the day. Data from China pointing to higher inflation and slower factory growth and spending offset some of the positive sentiment.
The Thomson Reuters-Jefferies CRB index, a bellwether for commodity prices, settled up 0.1 percent.
Twelve of the 19 markets tracked by the CRB ended up, with corn rising about 1 percent or more to lead gains.
ROBUSTA COFFEE, RAW SUGAR RALLY
Coffee futures traded in London rose to a five-month high, buoyed by concerns about dry weather in the world's largest producer Vietnam. Raw sugar prices in New York also rose.
London-traded robusta coffee have risen more than 14 percent so far this year, boosted by a combination of strong demand and concern that the 2013/14 crop in Vietnam could fall significantly due to dry weather.
"The drought is a continuing problem, and what it's doing is causing farmers to want to hold onto the current production," said Sterling Smith, futures specialist with Citigroup in Chicago.
In Monday's session, May robusta coffee futures in London rose $9, or 0.4 percent, to close at $2,190 a tonne after earlier touching $2,198, the highest level for the benchmark second month since October 2012.
May raw sugar futures in New York inched up 0.07 cent, or 0.4 percent, to finish at 18.82 cents a lb.
"We had a lot of activity last week in sugar, and we're taking a breather right now," said Michael McDougall, a vice president at Newedge USA in New York.
Sugar prices also found support from efforts by Brazil's federal government to support the country's cane industry and to rein in inflation. The Brazilian government plans to reduce taxes on ethanol, which may guide more cane into ethanol rather than sugar production, and also on food staples, seen as likely boost internal consumption. (Full Story)
CORN UP FOR 3RD DAY IN ROW
Corn futures in Chicago rose more than 1 percent, posting advances for the third straight day on tight stocks and on spillover from the rally that followed the bullish corn supply numbers the US government released Friday.
"Corn is leading everything higher today and it's technical support after the USDA report. Managed money is buying after the aggressive fund liquidation that we've seen," said Shawn McCambridge, an analyst for Jefferies Bache.
The US Department of Agriculture's March supply/demand report on Friday kept projected corn stocks unchanged at a 17-year low. The market had expected higher inventories.
<Center><b><i>Copyright Reuters, 2013</b></i><br></center>
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