COMMODITIES : Copper Prices at 3-Week High as Supplies Drop

Copper futures prices settled at the highest levels in three weeks Wednesday on indications of tightening supplies and rising demand.

On other markets, precious metals were mixed; grain and soybean futures sank; cattle futures were mixed while pork futures retreated, energy futures were mixed and stock index futures advanced.

Prices for future delivery of copper rose for the sixth time in the last seven sessions on the Commodity Exchange in New York over renewed concern about supplies and a better than expected economic outlook, analysts said.

Copper inventory levels tracked by the Comex and the London Metal Exchange have fallen in recent weeks, reinforcing ideas that the fundamental factors that caused copper prices to more than double last year have returned to the market, said Bette Raptopoulos, an analyst in New York for Prudential-Bache Securities.

The Comex said Wednesday that its copper inventories had declined by 927 tons to 13,715 tons, the third substantial decline this week.

“For a long while (last year) there was tightness in supplies,” said Raptopoulos. “In the early part of this year, the tightness seemed to recede. Now the market’s getting back to the reality of a tight supply situation.”

Copper settled 3.90 cents to 6.25 cents higher, with the contract for delivery in March at $1.035 a pound.

Gold advanced slightly while silver retreated a bit in quiet trading on the Comex.

Gold settled 90 cents to $1.70 higher, with April at $437.50 an ounce; silver was 1.2 cents to 5.1 cents lower, with March at $6.298 an ounce.

Soybean futures prices fell sharply in light trading on the Chicago Board of Trade. Grain futures also ended lower.

The soybean selloff was led by speculators and commission houses in reaction to lower cash prices for soybean meal and soybean oil, analysts said.

The losses were exaggerated by the thin trade, said Dale Gustafson, an analyst for Drexel Burnham Lambert.

Weaker cash prices also weighed on the corn market, while wheat futures declined on profit taking from the day’s highs.

Gustafson also noted some position-evening in advance of the Agriculture Department’s monthly grain supply-and-demand report, which was issued after the close.

The report estimated that U.S. wheat stocks on May 31, the end of the current wheat marketing year, would total about 1.28 billion bushels. The estimate was unchanged from figures issued a month ago.

The USDA estimated ending corn stocks as of Sept. 30 at 4.12 billion bushels, also unchanged from the previous estimate.

But the agency revised upward its estimate for ending soybean stocks as of Sept. 30, to 315 million bushels from 305 million.

The report was expected to have little impact on futures prices. Wheat settled 2 cents to 5 cents lower, with March at $2.9475 a bushel; corn was 0.50 cent to 2.75 cents lower, with March at $1.9875 a bushel; oats were 5 cents to 7.75 cents lower, with March at $1.8425 a bushel, and soybeans were 10.50 cents to 12 cents lower, with March at $6.0625 a bushel.

Frozen pork belly futures plummeted on the Chicago Mercantile Exchange in reaction to a Tuesday report showing 4.2 million pounds of bellies stored last week in the exchange’s warehouses outside Chicago.

The number, about double what the market had expected, came at a time of seasonal increases in hog slaughters, said Chuck Levitt, an analyst for Shearson Lehman Hutton.

Hog futures retreated on increased slaughters, while the cattle complex finished mixed on profit taking after two days of solid gains, he said.

Live cattle settled 0.37 cent lower to 0.10 cent higher, with April at 72.92 cents a pound; feeder cattle were 0.10 cent lower to 0.27 cent higher, with March at 81.27 cents a pound; hogs were 0.12 cent to 0.82 cents lower, with April at 43.60 cents a pound, and frozen pork bellies were 0.35 cent to 1.80 cents lower, with March at 52.20 cents a pound.

Crude oil prices edged upward listlessly on the New York Mercantile Exchange while the refined products ended mixed.

West Texas Intermediate crude oil settled 4 cents to 10 cents higher, with April at $15.49 a barrel; heating oil was 0.19 cent to 0.46 cent lower, with April at 43.03 cents a gallon, and unleaded gasoline was 0.17 cent to 0.29 cent higher, with April at 44 cents a gallon.

Stock index futures advanced slightly on the Chicago Mercantile Exchange, where the contract for March delivery of the Standard & Poor’s 500 index settled 0.55 point higher at 269.65. The underlying spot index closed 0.37 point lower at 269.06.

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