Grain and copper prices closed higher on Wednesday as the outlook for growing demand added an exclamation mark to a strong year for commodity prices.
Even a profit-taking bout in gold and silver couldn't take the shine off precious metals, which like copper and soybeans and cotton closed out 2003 hovering near multiyear highs.
For the year, the Reuters Commodity Research Bureau index of 17 US commodity futures contracts closed at 255.29, up 8 percent for the year and 11 percent since April 1.
A weak US dollar, which has boosted overseas buying of key US exports like grains and cotton, also continued to fuel demand for dollar-denominated metals like gold and silver.
The recovery in the US economy, especially in the last half of the year, also improved the demand outlook for industrial materials like lumber and copper.
On Wednesday, grain prices at the Chicago Board of Trade closed strong amid fresh rumours of export demand from China, another major theme of the year in many commodity markets.
China, which consumed a third of US soybean exports last season, has bought even more this marketing year and traders reported talk of fresh purchases this week. Soybeans for March delivery at CBOT closed up 9-1/4 cents at $7.94 a bushel, a gain of about 42 percent for the year.
Optimism about sales of US wheat to China also revived after US wheat industry officials said a team of Chinese wheat buyers will soon visit the United States. China has bought 400,000 metric tons of US wheat already this year and traders think purchases could rise past 1 million tons.
CBOT March wheat closed up 11-3/4 cents a bushel at $3.77, a gain of about 18 percent for the year.
CBOT March corn, buoyed by export shipments that are running 20 percent ahead of last season, closed 3-1/2 cents a bushel higher at $2.46. That price was essentially unchanged from a year earlier despite the just-completed harvest of a record 10.3 billion bushel corn crop in the United States.
Talk that China may become an importer of corn next year, instead of an exporter as in recent years, remained in the background. But Chinese demand for raw materials for its booming economy aided other commodities in 2003.
March cotton at the New York Cotton Exchange closed 0.70 cent higher at 75.07 cents a pound. That was up 50 percent for the year, even if it was down from an eight-year high at 84.70 cents on October 30 after China bought a record 1.238 million 500-pound bales of US cotton in a single week.
China's construction demand for copper, along with the US economy's recovery and a shortfall in mine production, pushed copper prices in New York to the highest closing price in 6-1/2 years on Friday. COMEX March copper rose 0.25 cent at $1.0455 a pound, up about 44 percent for the year.
In precious metals, the relentless fall of the dollar against the euro this year made dollar-priced metals cheaper to big European investors. That, along with the Iraq war and world political tensions, spelled huge gains in 2003.
Gold for February delivery at COMEX closed $1.10 lower at $416.10 an ounce on Wednesday. But that was still up about 20 percent for the year and just below an eight-year high.
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