COMMODITIES : Soybeans Hit 15-Year High Before Retreating

Soybean futures prices dropped sharply Thursday in frenzied trading that pushed the July contract to a 15-year high near $11 a bushel before uncertainty about the weather caused a nervous wave of selling.

Corn and wheat futures also retreated on the Chicago Board of Trade, while oats advanced the permissible limit for the fourth consecutive session and hit new record highs on fears of further damage to the drought-ravaged crop.

On other markets, cotton futures plunged; livestock and meat futures fell steeply; energy futures were mixed; precious metals were lower, and stock index futures also lost ground.

“We’re trading hysteria right now,” Cathy Leow, a New York-based grain analyst with Thomson McKinnon Securities Inc., said of the soybean market’s erratic performance.

The Chicago grain and soybean markets opened sharply higher on fears of deepening drought damage, but only oat futures sustained the bullish momentum on reports estimating oat yield losses of at least 50%.

Some Worry About Storms

Soybean futures began falling sharply at midday after the price for July had traded up the 45-cent limit to $10.995 a bushel. Corn and wheat rapidly followed suit.

“I was seeing quotes on my machine 10 cents behind what the market was trading,” Leow said.

Leow said she knew of no change in weather forecasts and blamed the selloff on a loss of nerve among inexperienced speculators.

But Mario Balletto, soybean analyst with Merrill Lynch Capital Markets Inc., said some traders were worried that storms in the Gulf of Mexico could spawn a hurricane that might eventually bring some moisture to the Farm Belt.

“The market is so nervous right now that even the remote possibility of rain was enough to trigger the big selloff today,” Balletto said.

Leow said some traders suddenly realized the enormity of their risk and decided to take profits.

Wheat settled unchanged to 6.5 cents lower, with July at $3.805 a bushel; corn was 7 cents lower to 3.5 cents higher, with July at $3.48 a bushel; oats were 3 cents to 15 cents higher, with July at $3.48 a bushel, and soybeans were 23.5 cents lower to 6.5 cents higher, with July at $10.325 a bushel.

Soybeans Fall

Most cotton futures plunged their 2-cents-a-pound daily limit on the New York Cotton Exchange, primarily in reaction to the drop in soybean prices, said Ed Whitten, cotton specialist in New York with Balfour Maclaine Corp.

Cotton for July delivery settled 2 cents lower at 66.40 cents a pound.

On the Chicago Mercantile Exchange, livestock and meat futures continued to move in the opposite direction of the grains on the theory that high feed prices and lack of grazing land will force cattle and pork producers to send more animals to slaughter, analysts said.

Cattle and pork futures fell the limit early in the day, then rose from their lows later in the session as soybean prices fell.

Live cattle were unchanged to 1.10 cents lower, with August at 62.22 cents a pound; feeder cattle were 0.80 cent to 1.27 cents lower, with August at 69.77 cents a pound; hogs were unchanged to the limit 1.50 cents lower, with July at 44.40 cents a pound, and frozen pork bellies were 0.45 cent to the limit 2 cents lower, with July at 40 cents a pound.

Gold Is Lower

Oil futures finished mixed on the New York Mercantile Exchange with near-term gasoline contracts up sharply on the drought-induced shipping slowdown on the Mississippi River, analysts said.

West Texas Intermediate crude oil settled 7 cents lower to 15 cents higher, with August at $16.37 a barrel; heating oil was 0.08 cent lower to 0.32 cent higher, with July at 43.94 cents a gallon, and unleaded gasoline was 0.01 cent to 0.66 cent higher, with July at 51.06 cents a gallon.

Precious metals futures dipped slightly on the Commodity Exchange in New York.

Gold was $1.80 to $2.10 lower, with August at $450.90 an ounce; silver was 3.3 cents to 3.6 cents lower, with July at $6.985 an ounce.

Stock index futures slipped on the Chicago Mercantile Exchange, where the contract for September delivery of the Standard & Poor’s 500 index settled 0.80 point lower at 277.15.

Tables, Page 8