Oil ended up for a third straight day on Friday despite a strong dollar as positive U.S. jobs data inspired hopes for more energy demand, and soybeans hit 5-1/2 month highs on lower-than-expected crop forecasts before easing on profit-taking.
Solid growth in American employment for a third month in a row indicated less need for monetary stimulus from the Federal Reserve, helping the dollar notch its biggest gain against the euro since January. U.S. stocks also rallied, to near 4-year highs. A strong dollar is usually a negative for commodities as it eases upward pressure on prices.
But Friday's session in oil, grains and metals were influenced more by optimism that the U.S. economy could pull away from other struggling regions of the world.
That could boost demand for raw materials, given the relative size of U.S. consumption versus other nations, analysts say. Even gold, which traded in opposite direction to the dollar at one time, rose with oil and other commodities. U.S. gold futures benchmark April contract settled up $12.80 at $1,711.50 an ounce. Gold is showing a lot of resiliency, precious metals attributing it partly to "firm oil prices". Crude oil was headed for a weekly gain after a three-day rally made up for Tuesday's price tumble caused by worries over Greece debt and shaky European economic data.
U.S. crude rose 82 cents for the session and 70 cents for the week, finishing at $107.40 a barrel. London's Brent rose 54 cents on the day and $2.33 on the week, closing at $125.98 In copper, aside from the growing confidence over the U.S. economy, investors were heartened by data indicating that China may soon be resorting to monetary easing that could work up demand for the base metal. China is the world's top consumer for copper, accounting for as much as 40 percent of total demand.
China's annual consumer inflation slowed sharply to a 20-month low at 3.2 percent in February, and factory output and retail sales also cooled more than forecast, giving policymakers ample room to further loosen monetary policy to support flagging growth.
Benchmark copper on the London Metal Exchange (LME) closed at $8,490, up almost 2 percent from a close of $8,330 on Thursday. For the week, however, it was down nearly 1 percent, after accounting for Tuesday's tumble of 2.5 percent.
Soybean prices rose to their highest level in 5-1/2 months on lower-than-expected South American crop estimates, before turning lower on profit-taking. Dry weather reduced the soy crop in Brazil, the world's No. 1 exporter, by 9 percent in three months and the crop in Argentina by 11 percent, the U.S. Department of Agriculture said on Friday.
The cuts in crop estimates by the USDA were much larger than traders had expected. May soybeans on the Chicago Board of Trade settled three quarters of a cent down for the session at $13.37-3/4 a bushel. For the week, it rose 4.25 cents. Its peak for Friday was $13.54 -- a high since Sept. 21.
Aside from profit-taking, soy was also pressured down by "spreading activity" in grains, which meant traders selling soybeans to buy corn and wheat. May corn ended at $6.45 a bushel, up 9-1/2 cents on the day and down 10 cents on the week.
May wheat finished at $6.43, up 8-1/4 cents for the session and off 31.5 cents on the week. (Reuters)
