COMMODITIES : Platinum Futures Soar on S. Africa Fears

Prices of precious metals futures rallied Monday on fears that South Africa would react to further U.S. economic sanctions by reducing its exports of platinum and gold, analysts said.

On other markets, copper futures also posted sharp gains; soybeans surged to four-year highs while the grains were mixed; cotton futures rallied strongly; livestock and meat were mixed; energy futures were mixed, and stock index futures retreated.

Platinum futures led the precious metals rally, which analysts linked to rumors that passage of a bill in Congress to tighten the economic screws on South Africa would be met with a retaliatory decrease in exports of strategic metals to the United States.

John Norris, chief metals trader for Citibank in New York, said the rumored retaliation would be “a tit-for-tat type thing, where if we would tighten sanctions, South Africa would cut off platinum supplies. And any time you have some concerns about South Africa, it benefits gold, too.”

Platinum futures settled $12.90 to $13.10 higher on the New York Mercantile Exchange, with the contract for delivery in July at $539.50 an ounce.

On the Commodity Exchange in New York, gold settled $3.50 to $4.10 higher, with June at $448.80 an ounce, and silver was 8.9 cents to 9.2 cents higher, with May at $6.47 an ounce.

Copper futures rallied to their highest levels in about four weeks on the Commodity Exchange in reaction to a report showing a drop in warehouse supplies at the London Metal Exchange, analysts said.

Soybean Prices Rally

Copper settled 60 cents to $2.80 higher, with May at $1.0065 a pound.

Soybean futures surged near the close on the Chicago Board of Trade, boosting the near-month contract to $7 a bushel for the first time since mid-1984. Wheat also finished higher, while corn futures retreated.

Despite weekend rains that dampened the Midwest, dry weather fears provided much of the impetus for the soybean rally, said Joel Karlin, an analyst in Chicago with Research Department Inc.

Wheat futures advanced moderately ahead of today’s winter wheat production report from the Agriculture Department, Karlin said. Corn retreated slightly amid a lack of export demand.

The USDA reported after Monday’s close that soybean planting in the 19 major soybean states was 14% complete as of Sunday. Corn planting in the 17 major corn states was 70% finished, the report said.

Wheat settled 2.75 cents to 4 cents higher, with May at $3.0175 a bushel; corn was 0.25 cent to 1 cent lower, with May at $2.0025 a bushel; oats were 1.75 cents lower to 1.75 cents higher, with May at $1.5925 a bushel, and soybeans were 7.25 cents to 9.50 cents higher, with May at $7 a bushel.

Dry weather fears also sparked a rally in cotton futures on the New York Cotton Exchange, said Ernest Simon, an analyst with Prudential-Bache Securities in New York.

Cotton settled 1.42 cents to 1.74 cents higher, with July at 63.15 cents a pound.

Cattle futures finished mixed on the Chicago Mercantile Exchange as traders sold the deferred-month contracts and bought contracts for near-term delivery, analysts said.

Hog futures settled higher on technical factors, while pork bellies were lower on fears of a continuing glut of bellies in cold storage.

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