COMMODITIES : Precious Metals Extend Drop

Precious metals futures extended their deep, across-the-board losses into the third day Thursday in response to recessionary fears and a sharp selloff on overseas markets.

On other markets, soybeans surged higher while the grains advanced modestly; stock index futures were higher; livestock and meat futures gained some ground, and energy futures were mixed.

Platinum futures at the New York Mercantile Exchange traded down the $25-an-ounce limit for the second straight day after investors in Tokyo and Hong Kong were forced to sell their precious metal holdings to cover steep losses in the stock markets, said Bernard Savakl, an analyst in New York with Paine Webber Inc.

The NYMEX reacted to the steep losses in both platinum and palladium by raising margin requirements, making it more costly to trade the metals.

Prices on the NYMEX platinum futures and the gold and silver futures on the New York Commodity Exchange broke through key support levels, triggering further selling, analysts said.

The losses in silver and platinum, primarily industrial metals, also indicated fears of an economic downturn, said Howard Levine, an analyst in New York with Shearson Lehman Bros.

“The market action was particularly bad since today’s losses occurred in the context of an extremely weak dollar and generally higher commodity prices,” which would normally be bullish for the metals, Levine said.

Platinum settled $25 lower across the board with the contract for delivery in December at $472.30 an ounce; gold was $8.70 to $11.70 lower with November at $457.50 an ounce and silver was 39.1 cents to 48 cents lower with November at $6.272 an ounce.

On the Chicago Board of Trade, soybeans closed at their highest levels in more than a week on rumors that the Soviet Union was buying U.S. soybean meal, said Steve Freed, an analyst in Chicago with Dean Witter Reynolds Inc.

Indications that the Soviets were also looking to buy U.S. corn sent corn futures prices higher, Freed said.

Wheat settled 1.25 cents to 1.50 cents higher with December at $2.8550 a bushel; corn was unchanged to 2.75 cents higher with December at $1.80 a bushel; oats were 1.25 cents to 4.50 cents higher with December at $1.8375 a bushel and soybeans were 6.50 cents to 10 cents higher with November at $5.3850 a bushel.

Stock index futures advanced on the Chicago Mercantile Exchange as traders viewed gains in the stock market and the lowering of many prime lending rates to 8.75% from 9% as encouraging signs for the economy, analysts said.

“There was also a perception by some that the dollar’s decline could be good for certain major industry groups,” said Steve Malinowski, an analyst in New York with E. F. Hutton & Co.

Futures on the Standard & Poor’s 500-stock index settled 4.70 points to 5.25 points higher with December at 255.40 points. The underlying index settled up 5.52 points at 254.48 points.

Interest rate futures advanced on the Chicago Board of Trade, with the December contract for the 30-year Treasury bonds settling up 28/32 at 90 3/32 points.

Livestock and meat futures on the Chicago Mercantile Exchange advanced on higher cash prices for cattle and hogs, said Charlie Richardson, an analyst in Denver with Lind-Waldock & Co.

The markets opened on a down note, reflecting lower cash prices for wholesale and boxed beef, Richardson said.

But cattle futures later advanced on reports of aggressive competition among packers for dwindling numbers of slaughter-ready fed cattle, he said.

Pork futures improved on higher cash prices once the cattle began to rally, Richardson said.

Live cattle were 0.40 cent to 0..47 cent higher with December at 62.62 cents a pound; feeder cattle were 0.22 cent to 0.65 cent higher with November at 72.80 cents a pound; live hogs were 0.25 cent to 0.90 cent higher with December at 42.70 cents a pound, and frozen pork bellies were 0.13 cent to 0.65 cent higher with February at 54.65 cents a pound.

Oil futures were narrowly mixed on the New York Mercantile Exchange.

West Texas Intermediate crude oil settled 9 cents lower to 6 cents higher with December at $18.98 a barrel; heating oil was 0.04 cent lower to 0.33 cent higher with December at 55.29 cents a gallon, and unleaded gasoline was 0.15 cent lower to 0.14 cent higher with December at 50.97 cents a gallon.

Tables, Page 8