COMMODITIES : Grain Futures Plunge After Rainy Weekend
Grain and soybean futures prices plunged Monday on the Chicago Board of Trade following a weekend of unexpectedly wet weather in the Midwest.
On other markets, rain-related selling sent cotton futures sharply lower; precious metals posted strong gains; energy futures retreated; livestock and meat were mixed, and stock index futures were lower.
Soybean futures took the hardest hit among the grains, with most contracts off more than 20 cents a bushel at the closing bell. Prices had skyrocketed in the previous two weeks due to extremely dry weather during the planting season.
Some spots in the western Corn Belt received more than three inches of rain over the weekend.
“This is obviously just a continuation of a very emotional market and, I think, a forbearer of things to come,” said Ted Mao, grain specialist with Shearson Lehman Hutton in New York. “I think there is uncertainty not only about the weather but about final acreage as well, and the market will have to sort itself out.”
Joel Karlin, an analyst in Chicago with Research Department Inc., said many traders decided to take profits ahead of the afternoon release of the National Weather Service’s 6-to-10-day forecast. But the market’s sentiment remained “extremely positive,” he said.
Cotton Futures Down
The closely watched weather outlook called for most of the United States east of the Mississippi to receive below normal rainfall during the first half of next week.
After the close, the Agriculture Department reported soybean planting was 62% complete as of Sunday. Corn planting was 95% finished and cotton planting was 71% done.
Wheat settled 2.50 cents to 7 cents lower with the contract for delivery in July at $3.4275 a bushel; corn was 5 cents to 7.25 cents lower with July at $2.155 a bushel; oats were 3 cents to 3.25 cents lower with July at $1.7075 a bushel, and soybeans were 19 cents to 21.5 cents lower with July at $7.575 a bushel.
Weekend rains also dampened the enthusiasm for cotton futures on the New York Cotton Exchange, where the December contract fell 2 cents a pound, the limit allowed for daily trading.
Like soybean prices, cotton prices have soared in recent weeks as dry weather dominated the planting season.
But “the upward move was largely exaggerated,” said Ernest Simon, cotton specialist in New York with Prudential-Bache Securities.
Cotton settled 0.83 cent to 2 cents lower with July at 65.55 cents a pound.
Surging platinum led the precious metals market, which showed surprising strength in the face of tumbling grain and oil prices.
Platinum was buoyed by overseas buying, particularly from the Middle East and Japan, analysts said.
In South Africa, a leader of the opposition political party urged a boycott on exports of certain “strategic materials,” including platinum, to the United States if Congress approves tougher economic sanctions against South Africa. That action also supported platinum prices, analysts said.
On the New York Mercantile Exchange, platinum settled $17.30 to $17.90 higher with July at $585.90 an ounce.
Livestock Futures Down
On the Commodity Exchange in New York, gold settled $4.10 to $5.10 higher with June at $462.80 an ounce; silver was 4.5 cents to 4.9 cents higher with May at $6.738 an ounce.
Energy futures slipped on the New York Mercantile Exchange. West Texas Intermediate crude oil settled 21 cents to 35 cents lower with July at $17.35 a barrel; heating oil was 0.51 cent to 0.88 cent lower with June at 46.91 cents a gallon, and unleaded gasoline was 0.24 cent to 0.92 cent lower with June at 51.44 cents a gallon.
Livestock and meat futures were mostly lower in a quiet session on the Chicago Mercantile Exchange.
Cattle prices fell on fears of a drop in wholesale beef prices and ideas that cash cattle prices were nearing a seasonal peak, said Philip Stanley, an analyst in Chicago with Thomson McKinnon Securities Inc.
Hog futures also were pressured by fears of lower cash prices. Frozen pork bellies finished mixed, with technical factors supporting the near-term contracts, Stanley said.
Live cattle settled 0.10 cent to 0.72 cent lower with June at 72.65 cents a pound; feeder cattle were unchanged to 0.20 cent lower with May at 80.90 cents a pound; hogs were 0.02 cent to 0.37 cent lower with June at 53.62 cents a pound, and frozen pork bellies were 0.25 cent lower to 0.77 cent higher with May at 54.02 cents a pound.
Stock index futures retreated on the Chicago Mercantile Exchange, where the contract for June delivery of the Standard & Poor’s 500 index settled 2.10 points lower at 250.60.
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