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Grains and oil markets hit pre-financial crisis highs Wednesday on supply fears stoked by a harsh winter in major crop-grower the United States and potential instability across the oil-rich Middle East.

Wheat settled up more than 3 per cent in Chicago, pulling corn and soybeans higher, after a winter storm pummeled the country's Midwest crop belt, paralyzing grain and livestock movement. Strong export demand for wheat added to the run.

"Right now in this environment, it's hard to set these prices back and keep them lower," said Shawn McCambridge, grains analyst at Prudential Bache Commodities in Chicago.

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Among other commodities, copper hit record highs for a third straight day before settling a touch lower. Raw sugar finished up 4 per cent at a 30-year peak as a massive cyclone hit sugar exporter Australia.

Investors will be keenly watching data on U.S. weekly jobless claims and factory activity Thursday to see if the economy kept pace with the commodities rally of recent weeks which was inspired largely by supply concerns.

A snowstorm dumped up to 20 inches (51 cm) of snow on the U.S. Midwest, delaying by half an hour the start of open outcry trading at the Chicago Board of Trade where agricultural markets are traded.

The storm wreaked havoc on agricultural operations, threatening the dormant winter wheat crop and the health of livestock herds. It also slowed the processing and transportation of agricultural commodities.

Very cold weather over the next several days in the U.S. Plains could provide further support to wheat as it exposes hard red winter wheat to the risk of winterkill.

OIL AT 2008 PEAKS

Oil prices spiked on fear that unrest in Egypt would spread across the Middle East and North Africa, sources of more than a third of world supply. Data showing record high crude stockpiles at a key U.S. storage hub moderated the rally, but only slightly.

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London's Brent crude closed above $102 a barrel for the first time since September 2008 when prices began crumbling in the run-up to the financial crisis.

In New York, West Texas Intermediate (WTI) crude, the benchmark for world oil, finished marginally higher at above $90 per barrel.

The 19-commodity Reuters-Jefferies CRB index, largely influenced by the WTI, hit October 2008 highs.

"We suspect that the (as) yet unresolved political standoff in Egypt will likely keep oil prices fairly well bid, at least for the balance of the week," said Edward Meir, senior commodities analyst at brokers MF Global.

Supporters of President Hosni Mubarak attacked protesters with fists, stones and clubs in Cairo on Wednesday as the Egyptian government rejected international calls for the leader to end now his 30-year-rule.

Egypt controls the Suez Canal and the Suez-Mediterranean oil pipeline, which together moved over 2 million barrels per day of crude and oil products in 2009. The canal and pipeline have functioned normally through the crisis, but there have been disruptions to oil shipments at Egypt's Alexandria and Damietta ports.

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At the back of many investors' minds is the worry that the unrest in Egypt could spread to bigger oil producers such as Libya or even Saudi Arabia.

BULLION LOSES SOME SHINE

Gold prices dropped nearly 1 per cent on Wednesday after an encouraging U.S. private-sector jobs report and relative stability in the Middle East -- despite protests in Egypt -- diverted interest to higher-risk assets and away from bullion.

Bullion extended initial losses after data showed U.S. private employers added more jobs than expected in January, the 12th consecutive month that companies took on staff. The news dented safe-haven demand.

Economic optimism in the United States and Europe boosted riskier investments such as equities at the expense of gold. On Tuesday, the Dow Jones industrial average closed above 12,000, hitting its highest level since June 2008. U.S. stocks, however, eased Wednesday.

"The sell-off seemed to illustrate that people had lost faith in gold and could see much better places to invest," said Peter Hillyard, an analyst at ANZ Bank.

"(But) I don't think people want to sell it. They are fearful about what is going to happen in the Middle East, and what really is going on in the markets," he said.

Spot gold fell 0.8 percent to $1,329.40 an ounce by 1:08 p.m. EST. U.S. gold futures for April delivery fell $9.50 an ounce to $1,330.80.

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