COMMODITIES : Energy Futures Continue to Take Drubbing

Energy futures prices took a beating Tuesday, the second day of falling prices this week, as the conviction grew that the Organization of Petroleum Exporting Countries would not be able to agree on workable oil production controls.

On other markets, pork futures rose; cattle retreated; wheat declined; corn and soybeans were mixed, and precious metals were higher.

Crude oil closed near the lows of the day on the New York Mercantile Exchange, with the January delivery of West Texas Intermediate just above $18 per 42-gallon barrel.

Traders said selling was very active at the close of trading and that when February crude oil broke below $17.95, it lost an additional 20 cents in just a matter of minutes.

West Texas Intermediate settled 33 cents lower to 1 cent higher, with the contract for delivery in January at $18.08 a barrel; heating oil was 0.22 cent to 1.08 cents lower, with January at 54.07 cents a gallon, and unleaded gasoline was 0.35 cent to 0.60 cent lower, with January at 46.49 cents a gallon.

Pork futures rose while cattle declined on the Chicago Mercantile Exchange.

Hog futures were higher all day and closed strongly because of higher-than-expected prices being paid for hogs in the spot market, said Philip Stanley, an analyst with Thomson McKinnon Securities in Chicago.

“(Meat) packers couldn’t buy all they wanted yesterday because of inclement weather,” said Stanley, so they were willing to pay up on Tuesday.

Cattle, on the other hand, had a disappointing session and closed near the lows of the day. “There seems to be enough cattle to meet demand,” said Stanley, adding however that technical market factors were probably the bigger reason for the weak futures prices.

Live cattle settled unchanged to 0.73 cent lower, with the December contract at 63.07 cents a pound; feeder cattle were 0.17 cent to 0.37 cent lower, with January at 73.40 cents a pound; live hogs were 0.25 cent to 0.67 cent higher, with December at 43.67 cents a pound, and frozen pork bellies were 0.17 cent to 0.85 cent higher, with February at 52.57 cents a pound.

Grain and soybean futures prices were mostly lower on the Chicago Board of Trade.

The Agriculture Department’s rejection of Soviet and Chinese bids for U.S. subsidized wheat put wheat futures on the defensive all day, said Victor Lespinasse, a trader with Dean Witter Reynolds.

The two countries combined were looking to buy about a million tons of the U.S. grain, he said, but apparently they bid too low.

Some soybean oil deliveries set contract highs, but soybeans and corn were mostly lower.

Trading of beans and corn was choppy in the absence of any news to give prices a direction, Lespinasse said.

Wheat was 1.75 cents to 5 cents lower, with the December contract at $3.055 a bushel; corn was 0.75 cent lower to 0.75 cent higher, with December at $1.8425 a bushel; oats were 0.50 cent to 5 cents higher, with December at $1.9850 a bushel, and soybeans were 3.25 cents lower to 2.25 cents higher, with January at $5.8725 a bushel.

Precious metals futures advanced on the Commodity Exchange in New York.

Gold was $2 to $2.60 higher, with the December contract at $483.50 an ounce, and silver was 4.5 cents to 5 cents higher, with December at $6.715 an ounce.

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