COMMODITIES : Rally Sends Sugar Prices to 5-Year High

Sugar futures jumped to close at their highest levels in five years at the Coffee, Sugar & Cocoa Exchange in New York on Tuesday as a rally gathered speed and pushed prices through key levels.

The March contract rose 0.73 cent to 10.18 cents a pound as prices posted new life-of-contract highs. Traders said the rally was generated by large computer-fund buying that emerged when prices broke significant resistance levels.

The gains in New York triggered sharp price rises in the London and Paris sugar futures markets.

A variety of factors fueled the rally. Syria and Jordan have scheduled large purchases on the world market this week, and India may also be buying, traders said.

Dry weather in Brazil’s cane-producing region touched off speculation that the new crop will be smaller than anticipated. Typhoon Roy could damage the sugar crop in the Philippines, lowering the potential supply.

On other futures markets, grains and soybeans were mixed to lower; livestock and meat futures were mixed; energy and precious metals futures were slightly higher, and stock index futures retreated.

There were no other especially sharp gains among the commodities, but neither were there sharp losses to offset sugar’s advance, he said.

On the Chicago Board of Trade, prices for soybeans to be harvested this fall declined substantially on the premise that farmers would plant more soybeans in hopes of selling them for higher prices, said Walter Spilka, an analyst with Smith Barney, Harris Upham & Co.

A soybean rally on Monday sent prices for the new-crop beans into an attractive position relative to corn futures, Spilka said, “and if you were a farmer, you might think about swinging acreage from corn to soybeans.”

Wheat futures advanced on news that the Agriculture Department had sold 23.1 million bushels of wheat Friday at its weekly auction. The market had been expecting a higher figure, Spilka said.

Wheat settled 0.75 cent to 2.5 cents higher, with March at $3.282 a bushel; corn was unchanged to 0.5 cent lower, with March at $2.007 a bushel; oats were 0.25 cent to 2 cents lower, with March at $1.905 a bushel, and soybeans were 9 cents lower to 1.5 cents higher, with January at $6.24 a bushel.

Cattle Futures Mixed

Livestock and meat futures ended mixed on the Chicago Mercantile Exchange, exhibiting price patterns that indicate bullish sentiments, analysts said.

Prices for delivery in the nearby months of January and March settled higher, but prices were lower on contracts for delivery in later months.

Wintry weather in much of the United States and sentiment that prices have already hit their seasonal lows boosted the buying of nearby contracts, said Charlie Richardson, an analyst in Denver with Lind-Waldock & Co.

Live cattle settled 0.25 cent lower to 0.52 cent higher, with February at 68.42 cents a pound; feeder cattle were 0.42 cent lower to 0.85 cent higher, with January at 82.27 cents a pound; live hogs were 0.50 cent lower to 0.45 cent higher, with February at 48.67 cents a pound, and frozen pork bellies were 0.13 cent lower to 0.17 cent higher, with February at 58.22 cents a pound.

Gold and silver futures advanced slightly on New York’s Commodity Exchange in “extremely slow and inactive” trading, said Len Alpert, metals trader for Refco Inc.

The metals gained primarily on the dollar’s weakness against other major currencies, he said.

Gold settled $1.10 to $1.50 higher, with March at $480.70 an ounce; silver was 1.9 cents to 2 cents higher, with March at $6.745 an ounce.

Most energy futures moved higher on the New York Mercantile Exchange amid indications that members of the Organization of Petroleum Exporting Countries were restraining production and reducing the size of discounts on crude oil, said Bob Baker, an analyst in New York with Prudential-Bache Securities Inc.

West Texas Intermediate crude oil settled 2 cents lower to 4 cents higher, with February at $17.35 a barrel; heating oil was 0.27 cent to 0.48 cent higher, with February at 51.19 cents a gallon, and unleaded gasoline was 0.05 cent to 0.22 cent higher, with February at 45.84 cents a gallon.

Stock index futures moved lower on the Chicago Mercantile Exchange. The contract for March delivery of the Standard & Poor’s 500 index settled 3.15 points lower at 249.25. The underlying spot index closed at 249.32, down 2.56.

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