COMMODITIES : Copper Futures Slump on Signs Supply Rising
Copper futures prices sank Monday on the Commodity Exchange in New York amid perceptions that demand for the metal is declining and supplies are on the rise. Precious metals futures also retreated on the Comex.
On other exchanges, energy futures were mixed; grain and soybean futures were mostly lower; livestock and meat were mixed, and stock index futures advanced.
The most active copper contract, for delivery in May, fell 2.65 cents to settle at 90.95 cents a pound.
Indications of slackening demand and rising supplies have pushed copper futures down nearly 10 cents a pound in the last two weeks and the market continues to display technical and fundamental weakness, analysts said.
“Even though you have fairly tight supplies in the near term, demand is not enough to justify these high prices,” said Jack Barbanel, director of futures trading at New York-based Gruntal & Co.
Precious Metals Retreat
Stephen Platt, metals analyst with Dean Witter Reynolds Inc. in Chicago, said he expected demand for copper to weaken further as summer approaches.
Precious metal futures retreated in reaction to the dollar’s recent strength, lower commodity prices in general and beliefs that higher interest rates are just around the bend, analysts said.
Trading activity was light ahead of today’s release of monthly government figures on economic growth and the opening this afternoon of a meeting between the Organization of Petroleum Exporting Countries and non-OPEC oil-producing countries, which could lead to an inflationary agreement to limit oil production.
Gold settled $2 to $2.30 lower, with June at $450.10 an ounce; silver was 5 cents lower across the board, with May at $6.365 an ounce.
Nervousness about today’s oil meeting also overshadowed the energy futures market at the New York Mercantile Exchange, where prices finished mixed.
West Texas Intermediate crude oil settled 10 cents to 12 cents higher, with June at $18.40 a barrel; heating oil was 0.04 cent to 0.61 cent higher, with May at 51.21 cents a gallon, and unleaded gasoline was 0.24 cent lower to 0.65 cent higher, with May at 52.05 cents a gallon.
Grain and soybean futures settled mostly lower on the Chicago Board of Trade despite indications early in the session that demand for soybean products was stronger than anticipated.
The soybean complex had led the grain markets higher in early trading after the Census Bureau reported lower-than-expected stocks of U.S. soybean meal at the end of March.
Corn futures weakened on poor export sales. The wheat market succumbed to continuing fears about dryness in the spring wheat growing region of the northern Plains, said Richard Loewy, senior grain and oilseed analyst for Prudential-Bache Securities Inc. in New York.
Wheat settled 2.75 cents to 3.75 cents lower, with May at $3.1125 a bushel; corn was 1 cent to 1.75 cents lower, with May at $1.9975 a bushel; oats were 0.50 cent to 2.25 cents higher, with May at $1.65 a bushel, and soybeans were 2.50 cents to 4 cents lower, with May at $6.59 a bushel.
Friday’s report by the Agriculture Department showing greater-than-expected numbers of cattle being fattened for slaughter sparked a sharply lower opening in cattle futures on the Chicago Mercantile Exchange, but prices recovered to finish mixed.
Despite the report’s indications of rising supplies, packing houses were aggressive buyers of cattle on Monday, said Charlie Richardson, an analyst in Denver with Lind-Waldock & Co.
Stock index futures moved higher on the Chicago Mercantile Exchange, where the contract for June delivery of the Standard & Poor’s 500 index settled 2 points higher at 263.85.
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