LONDON -- Copper prices hit record highs on Wednesday, driven by a weaker U.S. dollar and concern over Chilean supply, while gold neared two-week highs and crude oil remained above US$91 a barrel in a year-end buying flurry.
Sugar neared 30-year peaks, supported by strength in U.S. raw sugar futures, while dry weather in Argentina created some concern over supply of corn and soybeans, keeping the price of both near their highest levels in two years.
Benchmark three-month London Metal Exchange copper futures hit an all-time high of US$9,447 a tonne, little affected by an interest rate rise in top consumer China, as the dollar weakened and the closure of the Patache port terminal in Chile blocked exports from Collahuasi, the world's third-largest copper miner.
China is raising rates to contain inflation, but this should not be seen as a reason to sell commodities, said Dennis Gartman, who writes an investment newsletter. "The very modest weakness seen yesterday in commodities and equities was to be seen as an opportunity to buy, not as a reason to sell," he said in a note.
LME copper futures were last quoted at US$9,440 a tonne at 1253 GMT, up from US$9,360 on the LMESelect close on Friday.
With just a few trading sessions left to go in 2010, copper and gold look to be some of this year's big winners. The two metals have rallied about 28 percent this year, with gold set for a tenth consecutive yearly gain.
Spot gold was a touch lower on the day at US$1,403.22 an ounce by 1115 GMT, after hitting a two-week high of US$1,406.75 on Tuesday. U.S. gold futures for February delivery were virtually unchanged on the day at US$1,404.20.
"We're going to probably trade off currencies. The dollar index is still lower; that's supporting gold this morning," said VTB Capital analyst Andrey Kryuchenkov.
The U.S. dollar dipped against a basket of major currencies after a spike in U.S. Treasury note yields helped it recover some of the previous day's losses, thereby giving dollar-priced commodities a boost.
Crude oil futures steadied near two-year highs above US$91 a barrel ahead of U.S. inventory data, which is expected to show a drawdown in crude and distillate stocks because of severe weather in the world's largest user of oil.
U.S. oil prices had climbed to a 26-month high of US$91.88 on Monday, supported by cold weather on both sides of the Atlantic, a weak dollar and OPEC's statements that it saw no need for an urgent meeting to boost output.
"Investors are especially keen to follow whatever factor is most supportive of prices moving higher," said analysts at Cameron Hanover in a research note.
In agricultural commodities, ICE March raw sugar futures were up nearly 1 percent at 34.70 cents a pound.
Australia's northeastern sugar cane-growing regions were battered by torrential downpours, which ended the harvest early, but wheat growers have some relief in sight as good weather ahead could quicken the pace of the delayed harvest.
Soybean and corn futures were trading at their highest in more than two years on concerns that dry weather would curb supplies from Argentina, the world's leading exporter of corn and soybeans.
Chicago Board of Trade March corn futures were virtually unchanged on the day at US$6.22-3/4 a bushel, while January soybean futures were down 0.7 percent at US$13.66-3/4 a bushel.
