COMMODITIES : Soybean Futures Soar in Late Rally
Soybean futures prices soared in late trading Tuesday on the Chicago Board of Trade, gaining as much as 18.5 cents a bushel on indications that fewer acres will be available for soybean production. Grain futures also advanced.
On other markets, energy and precious metals futures increased; livestock and meat were mostly higher; and stock index futures rose.
The late soybean rally followed comments made in Washington by an Agriculture Department official that the USDA expects about 9 million acres to be put into its optional program for wheat and feed grains, analysts said.
The price-support program pays farmers 92% of their normal deficiency payments regardless of how little acreage they plant.
Ralph Klopfenstein, a deputy administrator in the Agricultural Stabilization and Conservation Service, said farmers signing up for the program were expected to take 3.5 million acres out of corn production instead of the 1.5 million acres the market had anticipated, according to Victor Lespinasse, a trader for Dean Witter Reynolds Inc.
That acreage could not be used for soybean production, which adds new tension to a market already stressed by fears of tight supplies.
“That was the catalyst,” Lespinasse said.
Analyst Jerry Gidel of Chicago-based G. H. Miller & Co., said the message was clear: “USDA officials indicated there could be less acreage of both corn and soybeans this spring.”
More Corn Planted
Speculation that Pakistan might be offered 50,000 tons of U.S. soybean oil under a subsidized export program added further fuel to the soybean rally, Lespinasse said.
Meanwhile the USDA announced that corn planting was under way with about 15% of the crop planted through Sunday. That compares to 11% on the same date last year and normal progress of 9% for that date.
Wheat settled 0.75 cent to 2 cents higher, with the contract for delivery in May at $3.12 a bushel; corn was 0.75 cent to 1.75 cents higher, with May at $2.005 a bushel; oats were unchanged to 0.50 cent higher, with May at $1.655 a bushel, and soybeans were 16 cents to 18.5 cents higher, with May at $6.775 a bushel.
Gold futures ended a five-day decline, settling slightly higher on the Commodity Exchange in New York. Silver also advanced.
“The gold market didn’t seem to know quite what it wanted to do today,” said Sharon Ziemian of Citibank in New York. “Right now it’s just kind of very quiet, trying to look for something to make it move in one direction or the other.”
Gold settled 90 cents to $1.10 higher, with June at $451.30 an ounce; silver was 1.8 cents to 2 cents higher, with May at $6.385 an ounce.
Oil prices moved moderately higher on the New York Mercantile Exchange as traders nervously watched the OPEC meetings that got under way in Vienna.
Officials of the Organization of Petroleum Exporting Countries and rival producers met to discuss ways of reducing production to boost prices.
Cattle Prices Mixed
West Texas Intermediate crude oil settled 18 cents to 21 cents higher, with June at $18.60 a barrel; heating oil was 0.46 cent to 0.83 cent higher, with May at 52.04 cents a gallon, and unleaded gasoline was 0.26 cent to 0.41 cent higher, with May at 52.42 cents a gallon.
Most cattle futures advanced on the Chicago Mercantile Exchange in reaction to higher cash prices and strong demand by beef packers, analysts said.
Live cattle settled 0.15 cent lower to 0.23 cent higher, with June at 70.40 cents a pound; feeder cattle were 0.10 cent to 0.57 cent higher, with April at 80.20 cents a pound; hogs were 0.50 cent lower to 0.40 cent higher, with June at 48.82 cents a pound, and frozen pork bellies were 0.15 cent to 0.48 cent lower, with May at 51.62 cents a pound.
Stock index futures advanced on the Chicago Mercantile Exchange, where the contract for June delivery of the Standard & Poor’s 500 index settled 0.95 point higher at 264.80.
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