COMMODITIES : Glut Sends Pork Belly Prices Down Daily Trading Limit

Frozen pork bellies plunged the limit allowed for daily trading on the Chicago Mercantile Exchange.

In other trading, livestock futures fell; copper futures fell sharply and precious metals retreated slightly; grains and soybeans were mixed, and stock index futures moved higher.

Frozen pork belly futures fell in a selloff sparked by a continuing unusually high amount of bellies in cold storage.

Large amounts of pork bellies have been moved into cold storage due to weak demand by bacon producers, and pessimistic traders expected a report issued after Tuesday’s close to show the trend continuing, analysts said.

The Merc’s weekly report on out-of-town storage showed more than 68 million pounds of pork bellies stored in freezers outside of Chicago, compared to about 21.9 million pounds a year ago. The figure represented an increase of about 2 million pounds during the past week.

Hog Futures Affected

Traders, expecting an increase of 2.5 million to 3.2 million pounds, had bid the contracts for May and July delivery down the daily limit of 2 cents a pound.

Selling in pork bellies spread to hog futures, which finished significantly lower. Cattle futures slumped in response to slack demand on cash markets, analysts said.

Live cattle settled 0.52 cent to 1.25 cents lower, with the contract for delivery in April at 74.75 cents a pound; feeder cattle were 0.65 cent to 1.20 cents lower, with April at 80.02 cents a pound; hogs were 0.20 cent to 0.75 cent lower, with April at 54.65 cents a pound, and frozen pork bellies were 1 cent to 2 cents lower, with May at 53.02 cents a pound.

Copper prices fell for a second straight day on New York’s Commodity Exchange, with all contracts settling below $1 a pound for the first time since March 8. The contract for May delivery plunged 4.55 cents, settling at 95.65 cents a pound.

Gold and silver futures retreated slightly, responding to the stronger dollar, said Bette Raptopoulos, a metals analyst with Prudential-Bache Securities Inc. in New York.

Soybean Prices Drop

Gold settled $1 to $1.90 lower, with June at $453.70 an ounce and May silver fell 4.5 cents to $6.425 an ounce.

Soybean futures closed lower on the Chicago Board of Trade as profit taking erased some of last week’s sharp gains. Corn futures retreated in sympathy with soybeans, while wheat rose on reports that China and India were seeking to buy U.S. wheat under the government’s subsidized export sales program, said Joel Karlin, a research analyst for Research Department Inc. in Chicago.

Wheat settled unchanged to 2.75 cents higher, with May at $3.2025 a bushel; corn was 1.50 cents lower to 0.25 cent higher, with May at $2.0625 a bushel; oats were 0.25 cent to 1.50 cents lower, with May at $1.665 a bushel, and soybeans were 1.50 cents to 3.50 cents lower, with May at $6.7925 a bushel.

Stock index futures advanced on the Chicago Mercantile Exchange, where the contract for June delivery of the Standard & Poor’s 500 index settled 1.35 points higher at 272.55. The underlying spot index closed 1.21 points higher at 271.37.

Tables, Page 8