COMMODITIES : Soybean Futures Rise on Weather Report
The soybean futures market shook off the dampening effects of last weekend’s rains and resumed its dry weather rally Tuesday, with prices on some contracts advancing nearly the 30-cents-a-bushel daily limit.
Grain futures also gained on the Chicago Board of Trade.
On other markets, copper futures prices fell sharply while precious metals were mixed; cocoa futures soared; livestock and meat were mostly lower; energy futures were mixed and stock index futures advanced.
Monday’s steep drop in soybean futures prices was only a temporary setback and the weekend rains that caused it were only a brief respite from the unusually warm, dry conditions that will continue to dominate springtime weather in the Midwest, according to Tuesday’s forecasts.
“The meteorologists lowered their forecasts of rain between now and next Monday and everybody jumped back on the bandwagon,” said Jerry Gidel, an analyst in Chicago with G. H. Miller & Co.
The soybean market is especially sensitive to weather factors amid dwindling stockpiles and fears of tight supplies if this year’s crop does poorly.
In addition to weather-related speculative buying, the soybean complex got a boost from India’s purchase of 20,000 metric tons of U.S. soybean oil and hedge-type buying of soybean meal futures by commercial grain processors, Gidel said.
Copper Futures Drop
The grains basically followed the soybeans, but corn also benefited from a government report of increased export demand and wheat was buoyed by an Agriculture Department report of dry weather damage to the winter wheat crop.
Wheat settled 4.75 cents to 18 cents higher, with the contract for delivery in July at $3.475 a bushel; corn was 4.25 cents to 5.25 cents higher, with July at $2.1925 a bushel; oats were 3.75 cents to 4.5 cents higher, with July at $1.75 a bushel, and soybeans were 12 cents to 29.5 cents higher, with July at $7.835 a bushel.
Copper futures prices sank on the Commodity Exchange in New York in response to steady increases in London Metal Exchange stocks of the metal, analysts said.
Tight supplies have been the main feature of the copper market for more than a year, and the recent gain of more than 12,000 tons on the London exchange indicates supplies of deliverable copper are growing, said John O’Connell, metals analyst with Refco Inc. in New York.
“The LME is now at 58,000 tons. That’s a big jump,” he said.
Copper settled 2.2 cents to 4.1 cents lower, with May at 98 cents a pound.
Gold futures settled slightly lower while silver advanced a bit on the Commodity Exchange.
Gold settled 10 cents to $1.70 lower, with June at $461.10 an ounce; silver was 1.5 cents to 1.6 cents higher, with May at $6.754 an ounce.
Cocoa futures soared to 3 1/2-month highs on New York’s Coffee, Sugar & Cocoa Exchange.
Cattle Prices Slide
Analysts cited strong technical factors and rumors that the Brazilian cocoa crop would be poorer than expected.
Cocoa settled $35 to $40 higher with July at $1,710 per ton.
Most cattle futures retreated on the Chicago Mercantile Exchange on bearish technical factors and expectations of falling cash prices due to slack demand for beef, analysts said.
“Retailers have been very lackluster in terms of buying volume to fill their needs for the post-Memorial Day period, and it seems like packers are also trying to buy cattle for a little less,” said Charles Richardson, an analyst in Denver with Lind-Waldock & Co.
Hog futures were mixed while frozen pork bellies retreated in reaction to a weaker tone in the cash market, Richardson said.
Live cattle settled 0.40 cent lower to 0.05 cent higher, with June at 72.35 cents a pound; feeder cattle were 0.80 cent lower to 0.10 cent higher, with May at 81 cents a pound; hogs were 0.22 cent lower to 0.20 cent higher, with June at 53.40 cents a pound, and frozen pork bellies were 0.25 cent to 0.40 cent lower, with July at 53.70 cents a pound.
Oil Prices Mixed
Oil futures prices closed mixed in light trading on the New York Mercantile Exchange ahead of the afternoon release of the American Petroleum Institute’s weekly inventory figures.
The report showed a buildup of both gasoline and crude oil stocks and a drop in supplies of distillates, which include heating oil.
West Texas Intermediate crude oil settled 7 cents lower to 5 cents higher, with July at $17.40 a barrel; heating oil was 0.20 cent to 0.40 cent higher, with June at 47.31 cents a gallon, and unleaded gasoline was 0.20 cent to 0.41 cent higher, with June at 51.85 cents a gallon.
Stock index futures posted substantial gains on the Chicago Mercantile Exchange, where the contract for June delivery of the Standard & Poor’s 500 index settled 3.65 points higher at 254.25.
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