* Risk off day after clashes in Athens, Madrid
* US crude loses 2 pct despite last week’s stockpile drop
* Copper hits 2-week low, after recent 4-1/2-month peak
* Soybeans and corn prices near 3-month bottom
By Barani Krishnan
NEW YORK, Sept 26 (Reuters) – Oil and metals prices tumbled
on Wednesday after Spain’s spiraling borrowing costs signalled a
worsening European debt crisis, and soybeans and corn fell to
near three-month lows as the Midwest harvest rapidly advanced.
Anti-austerity demonstrators clashed with police in Athens
and Madrid, and the euro fell to
a two-week against the dollar, pushing investors to cut
risk in markets from commodities to currencies and stocks.
The bellwether 19-commodity Thomson Reuters-Jefferies CRB
index lost more than 1 percent, dropping to a six-week
low.
“It is ‘risk off’ today,” said Olivier Jakob, energy analyst
at Petromatrix in Zug, Switzerland. “The Greek strike and
Spanish demonstrations are getting a lot of coverage.”
Data showing an unexpectedly sharp decline last week in U.S.
crude stockpiles – meaning more demand for oil than anticipated
– did little to boost crude prices.
The front-month contract for U.S. crude fell more
than 2 percent to below $89 a barrel, its lowest since Aug. 3,
after the U.S. Energy Information Administration reported a 2.45
million-barrel drop in crude inventories.
London’s benchmark Brent crude slid about 1 percent
to a one-week bottom below $109 a barrel.
Commerzbank oil analyst Carsten Fritsch said investors were
losing faith in the ability of the European Central Bank to hold
the euro zone together.
“No solution is in sight for the euro zone crisis,”
Frankfurt-based Fritsch said. “It is impossible to make
financial reforms in the face of such strong opposition from the
people.”
Greek police fired teargas at youths hurling petrol bombs
and stones as tens of thousands took to the streets in Greece’s
biggest anti-austerity demonstration in months.
The Bank of Spain said the country’s gross domestic product
fell at a “significant rate” in the third quarter, pressuring
European equities to their worst session in two months.
Copper prices hit a two-week low, posting their largest
single-session decline since Aug. 2.
Copper, used in construction and the power sector, had
gained about 16 percent from early August until hitting a 4-1/2
month peak last week on the back of stimulus measures from the
European Central Bank and U.S. Federal Reserve.
The metal has eased 4 percent since touching that peak of
$8,422 a tonne on the London Metal Exchange.
“After the central banks’ action prices ran ahead of the
fundamentals, but there is a general recognition now that the
rally was overdone and problems haven’t really gone away yet,”
said Standard Chartered analyst Daniel Smith.
“There are some key concerns at this point: there are
ongoing worries about the euro zone and about a softer tone in
China,” Smith said, referring to the world’s largest copper
buyer.
Three-month copper futures on the LME fell 1.9
percent to close at $8,120 per tonne, after rising 1.1 percent
in the previous session. U.S. copper for December delivery
finished down 1.3 percent at $3.71 a lb.
In grains markets, investors who had focused for more than
three months on tight supplies brought on by the worst U.S.
drought in half a century turned their attention to
macro-economic factors, including a stronger dollar.
Key soybean futures on the Chicago Board of Trade fell
below the key $16 a bushel level, touching their lowest since
early August.
CBOT corn also hit a near three-month low, falling
almost 3 percent to below $7.25 a bushel.
Prices at 2:10 p.m. EDT (1810 GMT)
LAST NET PCT YTD
CHG CHG CHG
US crude 89.58 -1.79 -2.0% -9.4%
Brent crude 109.59 -0.87 -0.8% 2.1%
Natural gas 3.030 0.106 3.6% 1.4%
US gold 1753.40 -13.00 -0.7% 11.9%
Gold 1750.76 -9.28 -0.5% 12.0%
US Copper 371.30 -5.95 -1.6% 8.1%
LME Copper 8143.25 -131.75 -1.6% 7.1%
Dollar 79.890 0.338 0.4% -0.4%
CRB 303.200 -3.510 -1.1% -0.7%
US corn 728.50 -19.00 -2.5% 12.7%
US soybeans 1573.75 -40.50 -2.5% 31.3%
US wheat 880.50 -17.75 -2.0% 34.9%
US Coffee 169.30 -4.35 -2.5% -25.8%
US Cocoa 2476.00 -7.00 -0.3% 17.4%
US Sugar 19.43 -0.43 -2.2% -16.4%
US silver 33.710 -0.003 0.0% 20.8%
US platinum 1634.50 2.70 0.2% 16.3%
US palladium 626.75 -14.10 -2.2% -4.5%
