Natgas, cotton help overcome other markets' weakness

10 Apr, 2013

NEW YORK: Natural gas and cotton rallied on Wednesday, helping the broader commodities complex stay firm, as oil, metals and agricultural prices fell on the back of a stronger dollar and weaker demand outlooks.

The dollar hit a four-year peak against the yen after minutes of the Federal Reserve's March meeting reinforced expectations the US central bank's bond-buying program might end sooner rather than later.

The Fed's bond-backed monetary stimulus, and the resulting dollar weakness, had been integral to the rebound in commodity prices in the first two years after the financial crisis erupted in 2008.

The dollar's rally on Wednesday led to mixed oil prices , and a lower close in copper and gold . Weaker demand outlooks also pressured energy and metals markets.

On the agricultural side, wheat futures fell 2 percent and soybeans turned lower in volatile dealings after the US Department of Agriculture's estimates for supplies at the end of 2012/13 came in well above analysts' estimates. ?

Even so, the 19-commodity Thomson Reuters-Jefferies CRB index ended virtually unchanged, with support from the run-up in natural gas and cotton.

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