COMMODITIES : Soybean Futures Surge to 11-Year Highs

Soybean futures prices soared to 11-year highs Friday on the Chicago Board of Trade and corn futures advanced the daily limit for the fourth consecutive session in anticipation of more dry weather and deeper crop losses.

On other exchanges, livestock and meat futures were mixed, sugar rose the limit, precious metals rose, energy futures declined and stock index futures advanced.

The Commodity Research Bureau’s index of 21 agricultural and industrial commodities jumped 2.52 points to a four-year high of 263.30.

Forecasts for a hot, mostly dry weekend in the Midwest underpinned the grain and soybean rally and furthered speculation of irreparable damage to drought-stressed crops, analysts said.

“The market is obviously convinced that the dry weather pattern is in place and going to continue,” said Rich Feltes, director of commodity research with Refco Inc., a large Chicago-based trading firm.

Corn crops, which are now entering a critical pollination stage, are particularly threatened by the drought, Feltes said. On that basis, the price for near-month delivery of corn closed above $3 a bushel for the first time since September, 1984.

Corn for July and September delivery advanced the 15-cents-a-bushel limit; July and August soybeans soared their 30-cents-a-bushel limit.

Wheat settled 0.50 cent to 6 cents higher, with July at $3.815 a bushel; corn was 7 cents lower to 15 cents higher, with July at $3.095 a bushel; oats were 2 cents to 9.75 cents higher, with July at $2.98 a bushel, and soybeans were 1.50 cents to 30 cents higher, with July at $9.715 a bushel.

Report Tops Estimates

Cattle futures settled mixed on the Chicago Mercantile Exchange ahead of the Agriculture Department’s monthly seven-state cattle-on-feed report.

The report showed a record number of cattle placed on feedlots last month to be fattened for slaughter, outpacing most pre-report estimates and resulting in predictions of lower cattle futures prices next week.

Much of the increased placements were probably caused by producers selling cattle to feedlots because of dry pastures, analysts said.

“The pasture levels are at their worst since the 1930s, since the Dustbowl period,” said Tom O’Hare, an analyst with Smith Barney, Harris Upham & Co. in New York.

Most analysts expect cattle and hog producers to liquidate large portions of their herds, driving prices sharply lower, if the drought continues.

Live cattle settled 0.55 cent lower to 0.28 cent higher, with June at 70.22 cents a pound; feeder cattle were 0.58 cent lower to 0.10 cent higher, with August at 71.80 cents a pound; hogs were 0.90 cent lower to 1 cent higher, with June at 49.80 cents a pound, and frozen pork bellies were 2 cents lower to 2 cents higher, with July at 43.10 cents a pound.

World sugar futures surged their 0.5-cent-a-pound limit on New York’s Coffee, Sugar & Cocoa Exchange on unconfirmed reports that Cuba had declared force majeure on most of its sugar shipments through July. Such a declaration means a producer or exporter will be unable to fulfill its contractual shipment obligations because of unavoidable circumstances.

Lumber Futures Dive

The July sugar contract, on which the daily price limit has been removed pending its upcoming expiration, settled 0.65 cent higher at 10.34 cents a pound.

Lumber futures plummeted on the Chicago Mercantile Exchange in reaction to the government’s report of an unexpected 12.2% decline in housing starts last month, analysts said.

Lumber for July delivery settled down the $5 limit at $194.50 per 1,000 board feet.

Precious metals advanced on the Commodity Exchange in New York in response to the higher grain prices and a decline in the bond markets, analysts said.

Gold settled $4.50 to $5.20 higher, with August at $458.30 an ounce; silver was 11.4 cents to 13.6 cents higher, with July at $7.255 an ounce.

Energy futures prices declined on the New York Mercantile Exchange in a reversal of Thursday’s sharp gains, which were prompted by unconfirmed rumors that Iranian leader Ayatollah Ruhollah Khomeini had died.

West Texas Intermediate crude oil settled unchanged to 21 cents lower, with July at $16.45 a barrel; heating oil was 0.37 cent to 0.48 cent lower, with July at 43.64 cents a gallon, and unleaded gasoline was 0.22 cent to 0.55 cent lower, with July at 49.97 cents a gallon.

Stock index futures advanced modestly on the Chicago Mercantile Exchange, where the contract for September delivery of the Standard & Poor’s 500 index settled 0.65 point higher at 272.75.