COMMODITIES : Rain Forecast Dampens Rally in Soybeans

Forecasts for light rain in the eastern Corn Belt helped slow the rise of grain and soybean futures prices Wednesday, but meteorologists held out little hope for drought-breaking showers by the July 4 weekend.

On other markets, precious metals futures plummeted, Treasury bond and stock index futures posted sharp gains, livestock and meat futures fell sharply and energy futures advanced.

On the Chicago Board of Trade, oat futures advanced their daily limit to a record $3.34 a bushel, and corn for July delivery closed up the permissible limit for the seventh straight day. But the forecasts for rain left soybeans prices mixed, and wheat was mostly lower as harvesting of the winter crop accelerated.

Analyst Steve Freed of Dean Witter Reynolds Inc. said the predicted rainfall was unlikely to amount to much.

“Thirty percent of the belt has a chance for 50% coverage of a quarter- to a half-inch,” Freed said. “To me, that’s not enough when we’re losing half an inch a day.”

The National Weather Service issued a new 6-to-10-day forecast Wednesday afternoon extending its prediction of hot, dry Midwestern weather through July 2.

Oat futures soared on reports that as much as 50% of the U.S. oat crop had been lost to the drought.

Wheat settled 6 1/2 cents lower to 5 cents higher, with July at $3.83 a bushel; corn was 4 cents to the limit 10 cents higher, with July at $3.44 1/2 a bushel; oats were 7 cents to 15 cents higher, with July at $3.33 a bushel, and soybeans were 15 cents lower to 8 cents higher, with July at $10.54 1/2 a bushel.

Platinum Futures Dive

A stronger dollar and an unexpected 2.2% drop last month in orders to U.S. factories for durable goods pummeled the precious metals markets and underpinned sharp gains in stock index and Treasury bond futures.

Both developments appeared to discourage inflation. That was good news for consumers but bad news for precious metals prices, which generally rise with inflationary expectations, analysts said.

Platinum, traded on the New York Mercantile Exchange, took the biggest hit. Platinum futures settled $14.70 to $15.10 lower, with July at $567.60 an ounce.

On New York’s Commodity Exchange, gold was $2.30 to $3.60 lower, with August at $453 an ounce; silver was 17.5 cents to 21.8 cents lower, with July at $7.02 an ounce.

Treasury bond futures soared on the Chicago Board of Trade, with the contract for September delivery up 1 14/32 points at 88 3/32.

Stock index futures surged on the Chicago Mercantile Exchange, where the contract for September delivery of the Standard & Poor’s 500 index settled 2.55 points higher at 277.95.

Livestock and meat traders on the Chicago Mercantile Exchange received a report after the close that underscored the plight facing cattle and pork markets.

Meat Supply Glut

The Agriculture Department reported there were 111.5 million pounds of frozen pork bellies in cold storage on May 31. The figure was 91% larger than last year’s May 31 total and the third largest on record for that date, said Chuck Levitt, an analyst in Chicago with Shearson Lehman Hutton Inc.

In addition to the overwhelming supply of frozen pork bellies, which are sliced to make bacon, frozen supplies of other pork products, poultry and beef also were up, indicating prices will fall as the summer goes on.

Live cattle settled 0.58 cent to 1.03 cents lower, with August at 63.32 cents a pound.

Tables, Page 10