Commodities dropped as hazardous radiation delayed efforts to end Japan’s nuclear crisis and the coalition of German Chancellor Angela Merkel was defeated in a state election, hurting the outlook for Europe’s largest economy. Raw materials, measured by the Standard & Poor’s GSCI Spot Index of 24 futures, fell for a second day, losing as much as 0.7 percent to 713.83, before standing at 714.27 at 12:55 p.m. London time. The index advanced 2.4 percent last week and is heading for a third quarterly gain. Crude oil in New York dropped as much as 0.9 percent and copper declined 1.2 percent. “The situation in Japan doesn’t seem to be improving and this is hurting sentiment across the financial markets,” Pan Jinghua, an analyst at Citic Futures Co., said from Shanghai. The SPGSCI gauge pared gains this year after the magnitude- 9 temblor hit Japan, the third-largest user of crude oil, on March 11. The spread of radioactive contamination adds to the drag on economic growth, already hurt by quake-related damage of as much as 25 trillion yen ($306 billion.) In Germany, Merkel’s Christian Democratic Union didn’t win enough votes in yesterday’s election for a majority, marking the end of the party’s 58-year state rule and triggering losses in the euro. The common currency weakened against the dollar for a second day after EU leaders pared the startup capital for an emergency-aid fund, following a cut in Portugal’s credit rating by Standard & Poor’s and Fitch Ratings last week. Dollar, Crude The Dollar Index, which measures the greenback’s value against six major currencies, rose as much as 0.3 percent today after gaining 0.7 percent last week, boosted by euro weakness. Commodities normally move counter to the U.S. currency. In the past year the SPGSCI index jumped 36 percent as the gauge for the dollar dropped 6.2 percent. Crude for May delivery declined as much as 0.9 percent to $104.50 a barrel in New York and last traded at $104.61. “Oil markets are awaiting clearer signals of how damaging the recent oil price increases might be to the economy, both in the U.S. and globally,” said Deutsche Bank AG analysts Adam Sieminski and Xiao Fu in a report today. “Despite expected healthy U.S. consumption growth in February, our economists are less sanguine concerning Conference Board consumer confidence.” Copper, Japan Copper for delivery in three months dropped 1.2 percent to $9,567.26 a metric ton on the London Metal Exchange. The benchmark contract headed for its first quarterly loss in three. Exchange-monitored stockpiles have risen 17 percent since end- 2010. Gains in inventories are “a sign that China may not be restocking to the extent many had previously expected,” Peter Richardson, chief metals economist at Morgan Stanley in Melbourne, said in a report. China is the largest user. Japan’s radioactive contamination in food is likely to increase as the Asian nation entered a third straight week of battling the biggest nuclear-energy crisis since Chernobyl. “The number of radiation-affected foods will likely increase as each prefecture is testing its produce,” Taku Ohhara, an official at the Ministry of Health, Labor and Welfare, said in a phone interview yesterday. Some 99 products, including milk and vegetables, were found to be contaminated in Tokyo and five prefectures to its north and east as of late March 26, according to the health ministry’s statement on its website. Japan may purchase 5.2 million tons of wheat this season, the U.S. Department of Agriculture estimates. “Following the food contaminations in Japan, people expect the country may want to secure more grains” from overseas, Ker Chung Yang, an analyst at Phillip Futures Pte., said by phone from Singapore. Corn for May delivery gained as much as 0.8 percent to $6.9475 a bushel in Chicago before trading at $6.94. To contact the reporter on this story: Chanyaporn Chanjaroen in Singapore at cchanjaroen@bloomberg.net To contact the editor responsible for this story: James Poole at jpoole4@bloomberg.net

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