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COMMODITIES – Oil, Copper And Wheat Fall On Dollar, Supply Woes

* Dollar, rising stockpiles and warmer weather hurt prices
* Crude oil down 1.8 percent, finishing at $78 a barrel
* Copper loses half percent, wheat more than 3 percent

NEW YORK, Jan 15 (Reuters) – Commodities fell broadly on Friday as a stronger dollar, surging supplies of raw materials and unfavorable weather forecasts dented the outlook for energy, metals and grains. “We have a combination of high inventories and stock market weakness,” said Peter Fertig, analyst at Birmingham’s Quantitative Commodity Research. “Of course, the U.S. dollar plays a crucial role.”

The dollar rose against a basket of major currencies, making it costlier for those using monies such as the euro and yen to buy commodities denominated in the greenback. U.S. stocks, seen as a proxy for economic growth, fell more than 1 percent, weighing on the demand prospects for industrial raw materials, such as crude oil and copper.

“You’re seeing further signs that, without buoyant economic optimism, the oil markets continue to slide lower because of the poor underlying fundamentals in the market,” said Gene McGillian, an analyst at Tradition Energy in Stamford, Connecticut.

The Reuters-Jefferies CRB index, a commodities bellwether that tracks prices across 19 futures markets, settled down 1 percent. U.S. crude oil, the index’s main component, finished 1.8 percent lower. Copper lost more than half a percent, while wheat fell more than 3 percent. Aside from the negative impact of the dollar, forecasts for warmer weather have threatened to bump up supplies of energy commodities, such as heating oil, and grains like wheat and corn.

“The issue with corn is that winter wheat acres have cast a spotlight on how many corn acres can be planted this year, and on some calculations that we have done you could be looking at an extra 2 or 3 percent,” said Scott Briggs, agricultural commodity strategist at ANZ in Melbourne. U.S. crude oil’s benchmark front-month contract settled down $1.39 at $78 a barrel. Mild weather this week has reduced forecasts for fuel consumption, particularly in the United States, the world’s top oil consumer, after a cold snap in many parts of the Northern Hemisphere helped push prices above $80 early in January.

New York’s benchmark copper contract for March finished down 2.15 cents at $3.3660 per lb. On the London Metal Exchange, copper for three-month delivery ended down $60 at $7,430 a tonne. The metal, used in power and construction, touched $7,796 a tonne on Jan. 7, reaching its loftiest level since August 2008. One reason for the price pull-back has been the accelerated pace of inventory builds in recent weeks, analysts said. Stockpiles of copper in LME warehouses have swelled to 525,475 tonnes, their highest level since the middle of February and more than double the inventory in July.

U.S. wheat futures for March ended down 17-3/4 cents at $5.10 a bushel in Chicago, hitting their lowest level in more than three weeks. March corn settled down 9-1/2 cents at $3.71-1/2 a bushel, falling for the fifth straight day, on continued pressure from record production outlooks by the U.S. Department of Agriculture.

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