COMMODITIES-Copper, oil rally; commods head for strong Q3 gain

News was prepared under the information support of Online Daily Newspaper on Hellenic and international Shipping "Hellenic Shipping News".

30 Sep 2010

Copper rose Thursday,hitting two-year highs after strong manufacturing data inChina, the metal's top consuming country, while a weak dollarboosted commodities in general, setting the sector up to endthe third quarter with strong gains.
Oil touched seven-week highs on heavy volume aftergovernment data showed a drop in stockpiles of U.S crude andpetroleum products.
Gold rode the weak dollar to its ninth record highsince Sept. 14, before settling off that peak.
Bucking the broad rally in commodities, cotton slid 5percent but remained over the key level of $1 a pound. Cocoafell nearly 2 percent and soybeans slid 1 percent.
Still, the Reuters-Jefferies CRB index hit 8-1/2month highs for a second straight session and was poised to endthe third quarter up 10 percent on Thursday.
Anticipation of the first quarterly gain for commoditiesthis year and the potential for profit-taking thereafter couldbe a reason for heavy volume in many sectors, traders said.
"It's end-of-the-month, it's end-of-the-quarter and theyare probably jumping the gun a little bit," said PNM Trading'sPeter Adams, who follows the cattle market, which finishedlower as funds liquidated long positions.
"They have another day and a half to do it, but that'sprobably what this is all about," Adams said.
Stocks markets also reflected quarter-end window-dressingactivity. Investors on Wall Street took profits on a month-longrally, bracing for more volatility going forward.
Thursday's direction in commodities could hinge on finalU.S. GDP numbers for the second quarter and weekly joblessclaims data, analysts said.
Copper futures jumped to their highest levels since themiddle of 2008. Copper prices are up nearly 10 percentfor the year and almost 25 percent for the quarter.
New York's copper contract for December finished up2.45 cents at $3.6615 per lb, marking the highest settlementfor a benchmark copper contract since July 22, 2008.
In London, copper's third-month contract peaked at$8,075 a tonne, a high dating back to August 2008, beforeending at $8,064, up $154 from Tuesday's close.
Demand prospects for copper got a boost when HSBC's ChinaPurchasing Managers' Index rose to its highest levels sinceApril.
The data pointed to renewed, though moderate, momentum inChina's vast industrial sector. China is the world's No. 1copper buyer, with imports standing at 2.954 million tonnesthis year -- just below the record-setting levels of 2009.
A weak dollar also encouraged buyers, as the greenback hita five-month low versus euro.
U.S. crude oil futures jumped nearly 2 percent, finishingat their highest levels since Aug 11 as U.S. data showedstockpiles of distillate inventories dropped 1.27 millionbarrels in the week to Sept. 24, counter to expectations for a300,000 barrel build.
New York's front-month crude contract finished up$1.72 at $77.86 per barrel, a seven-week high.

Source: Reuters