NEW YORK: Most commodities closed lower on Monday as a strong dollar crushed raw materials priced in the currency, while crops such as soybeans and cocoa were further hurt by potential oversupplies and by demand concerns.
The dollar surged against the euro as Greece appeared unlikely to reach an agreement to restructure private sector debt ahead of an European Union summit, seen as key to the future of the bloc's debt balance.
Soybean futures in Chicago closed 3 percent down, recording their largest one-day deficit in four months, as more-than-expected crop-friendly rainfall nursed South America's soy crops back to health.
New York-traded cocoa fell even more, over 5 percent, for its weakest session in 11 months.
US copper futures retreated from a four-month peak to join the slide, along with crude oil.
The broad decline pushed the 19-commodity Thomson Reuters Jefferies CRB index down more than 1 percent for its sharpest drop in nearly 3 weeks.
"It's difficult to see how this rally can continue," Jesper Dannesboe, a senior commodities strategist for Societe Generale, said, referring to copper.
"People are wondering whether there's much upside from here given there's still slowing growth in China and the prospect of weak growth in Europe," Dannesboe said.
Soybean prices plunged after dry weather that had been stressing crops in Argentina and southern Brazil was replaced over the past week by rains, which were expected to continue in the near term.
"There will be good rains in Argentina throughout the week," said John Dee, meteorologist for Global Weather Monitoring.
Soy futures for March on the Chicago Board of Trade closed down 33-3/4 cents at $11.85-1/4 a bushel.
Cocoa was depressed by the prospect of hedge selling as top grower Ivory Coast announced it would start forward-selling its crop at an auction this week.
"I think it will be interesting (to see) how many people participate and in what volume," said an European commodity fnd analyst, referring to the auction. "We're going to get a lot of unseasonal selling between now and September."
March cocoa futures in New York tumbled $126, or 5.2 percent, to close at $2,280 a tonne. The contract had risen to a peak of $2,480 on Friday, the highest for the front month since mid-November.
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