COMMODITIES : Soviet Deal Sends Cotton Prices Up to Trading Limit
Soviet purchases pushed cotton futures prices up to the limit allowed for daily trading Wednesday while crude oil futures slipped below $16 a barrel for the first time in nearly a year.
On other markets, precious metals advanced; grains and soybeans retreated, and livestock and meat futures were mixed.
Traders at New York’s Cotton Exchange bid cotton futures up the 2-cents-a-pound limit late in the session on rumors of Soviet purchases and expectations that today’s weekly export sales report from the Agriculture Department would show a large increase in foreign buying, analysts said.
“Since the (stock market) crash, export sales have been disappointing and running behind year-ago levels,” said Judy Weissman Ganes, cotton analyst with Shearson Lehman Bros. in New York.
Crude Oil Declines
Cotton settled 1.82 cents to 2 cents higher, with the contract for delivery in March at 65.88 cents a pound. The March, May and July contracts all settled limit up.
Crude oil futures fell below $16 a barrel for the first time in nearly a year amid continuing pessimism about the Organization of Petroleum Exporting Countries’ ability to limit its members’ production and control the prices they charge, analysts said.
Crude oil settled 57 cents to 68 cents lower, with January at $15.96 a barrel; heating oil was 1.73 cents to 1.86 cents lower, with January at 49.27 cents a gallon, and unleaded gasoline was 1.30 cents to 1.55 cents lower, with January at 41.70 cents a gallon.
Gold and silver futures rebounded from Tuesday’s sharp losses to settle higher on the Commodity Exchange in New York.
But the metals closed lower than they opened, peaking early in the session and falling as oil prices slipped lower, said Bernard Savakl, an analyst in New York with Paine Webber Inc.
Gold settled $2.60 to $2.80 higher, with December at $485.30 an ounce; silver was 10.6 cents to 11.1 cents higher, with December at $6.756 an ounce.
Sale to India
Grain and soybean futures retreated on the Chicago Board of Trade despite a soybean oil rally that saw the July contract hit a new high of $20.36 per 100 pounds.
The gain in soybean oil was spurred by the Agriculture Department’s offer to sell 300,000 metric tons of subsidized U.S. vegetable oil to India and by indications that world demand for edible oils was increasing, said Walter Spilka, an analyst in New York with Smith Barney, Harris Upham & Co.
Soybean meal retreated as some traders sold meal and bought oil, and soybean futures followed the meal to a lower close, Spilka said.
Corn futures declined slightly as the USDA lowered posted county prices in some areas to encourage redemption of corn certificates, he said.