COMMODITIES : Dry Weather Sends Soybeans Up the Limit

Soybean, corn and oat futures soared the limit allowed for daily trading on the Chicago Board of Trade on Friday amid fears of crop damage caused by dry weather. Wheat futures also moved sharply higher.

On other markets, pork futures prices plummeted while cattle futures were mixed; precious metals dipped; energy futures retreated, and stock index futures were lower.

The Commodity Research Bureau’s index of 21 commodities advanced 2.02 points to 255.10, with 10 components scoring gains, eight showing losses and three ending mixed.

Friday’s session ended a week of dramatic gains for the grain and soybean markets and reflected concerns that the emerging crops face a real threat if arid conditions in the Midwest continue, analysts said.

The amount of spring rain in the Midwest has been far below normal. Most of the region’s central portion--including Illinois, Indiana and Missouri--received no measurable rainfall for 10 days, the National Weather Service reported Friday, and south-central Wisconsin had gone more than three weeks without measurable precipitation.

No Weekend Rain

Weather forecasts called for no rain in the region this weekend and the weather service, in a 6-to-10-day forecast issued after the close, predicted below-normal precipitation and above-normal temperatures in the Midwest through June 13.

“This is the first time in at least six weeks that we’re finishing up a Friday afternoon without having to worry about a weekend weather system moving in,” said Rich Feltes, grain analyst for Refco Inc. in Chicago. “This weekend, it clearly is not going to rain.”

Feltes said field observers had reported that the soybean and corn crops were off to a “sub-optimal start” and were in worse condition than in either 1980 or 1983, years that also had unusually dry springs.

Wheat settled 2 cents lower to 14 cents higher, with the contract for delivery in July at $3.6274 a bushel; corn was up 9.75 cents to 10 cents, the daily limit, with July at $2.345 a bushel; oats were up the 10-cent-a-bushel limit across the board, with July at $1.965 a bushel, and soybeans were up 8.75 cents to 30 cents, the daily limit, with July at $8.49 a bushel.

Most pork futures posted sharp losses on the Chicago Mercantile Exchange in response to a drop in cash prices, analysts said.

“We had lower-than-expected cash hogs come in this morning on the heels of a larger-than-expected country hog run yesterday,” said Philip Stanley, an analyst in Chicago with Thomson McKinnon Securities Inc.

“The packers had already fulfilled their Saturday slaughter requirements and demand diminished,” he said. “That caught the trade by surprise and washed the market out pretty good to the downside.”

Metals Retreat

Cattle futures were mixed as selling sentiment spilled over from the pork pits, offsetting the positive effects of anticipated higher boxed beef prices, Stanley said.

Live cattle settled 0.30 cent lower to 0.33 cent higher, with June at 72.65 cents a pound; feeder cattle were 0.10 cent to 0.68 cent lower, with August at 75.92 cents a pound; hogs were 1.40 cents lower to 0.23 cent higher, with June at 52.45 cents a pound, and frozen pork bellies were 0.83 cent to 1.50 cents lower with July at 55.55 cents a pound.

Precious metals retreated on profit taking after three days of sharp gains.

“I think the metals have established that they are in an up trend, a pretty strong up trend,” said Craig Sloane, metals analyst in New York with Smith Barney, Harris Upham & Co. “Sometimes when you get a market in an up trend it backs off a bit, then continues on its way. I think that’s what we’re seeing here.”

On the Commodity Exchange in New York, gold settled $1.80 to $2.20 lower, with the active August contract at $469.30 an ounce; silver was 1.8 cents to 3.5 cents lower, with July at $7.27 an ounce.

Platinum on the New York Mercantile Exchange was $17.40 to $17.60 lower, with July at $610.60 an ounce.

Oil prices slipped on the New York Mercantile Exchange in quiet trading based mostly on technical factors, analysts said.

West Texas Intermediate crude oil settled 10 cents to 15 cents lower, with July at $17.50 a barrel; heating oil was 0.25 cent to 0.31 cent lower, with July at 47.13 cents a gallon, and unleaded gasoline was 0.38 cent to 0.62 cent lower, with July at 50.89 cents a gallon.

Stock index futures retreated slightly on the Chicago Mercantile Exchange, where the contract for June delivery of the Standard & Poor’s 500 index settled 0.25 point lower at 266.10.