COMMODITIES : Corn, Soybean Futures Advance Daily Limits

Corn and soybean futures prices jumped their daily limits Monday at the Chicago Board of Trade following another hot, dry forecast and fears of further crop damage from the Midwestern drought.

The drought-related buying spree spilled onto other exchanges: Cotton futures prices soared while cattle and hog prices rallied sharply on drought-related speculation.

In other markets, silver surged, while gold was mixed and energy prices declined.

“We’re trading forecasts,” said Cathy Leow, a New York-based grains analyst with Thomson McKinnon Securities Inc. “While the weekend was dry . . . basically we’re looking at dryness through the rest of the week” across the major growing regions.

CBOT traders also were buying in anticipation of a late Monday USDA report expected to show continued deterioration of the nation’s corn and bean crops, she said.

Corn for delivery in all months advanced the 10-cents-a bushel daily limit, and soybeans moved up the 30-cents-a bushel limit for all months.

Cotton Skyrockets

Wheat settled 14.5 cents to 20 cents higher, with the contract for delivery in July at $4.50 a bushel; corn was 10 cents higher across the board, with the July contract at $3.525 a bushel; oats were 15 cents higher across the board, with September at $3.78 a bushel, and soybeans settled 30 cents higher across the board, with July at $10.595 a bushel.

Cotton prices surged in trading at the New York Cotton Exchange, with deferred months advancing the 2-cent-a-pound daily limit in sympathy with skyrocketing grains prices, said Ed Whitten, a cotton specialist with New York-based Balfour Maclaine Corp.

Cotton settled 0.95 cent to 2.70 cents higher for the nearby July contract, which has no daily limit. The July contract was at 68.80 cents a pound.

Weekend rain in some parts of the cotton belt eased dry conditions but rain still was needed in the Central Belt and Southeast, Whitten said. Cotton doesn’t require as much moisture as soybeans and grains but still was being hurt by the drought, Whitten said.

Cattle and hog futures prices advanced sharply in trading at the Chicago Mercantile Exchange.

Expectations of a long-term drop in supplies sparked a buying wave that pushed prices up the 1.50 cent-a-pound daily limit in deferred contracts for cattle and hogs, and up the 2-cent limit in pork bellies, said Philip Stanley, an analyst in Chicago with Thomson McKinnon Securities.

“There is assumption that there is liquidation going on right now in the breeding herd” as the drought damages feed crops, Stanley said. That means a short-term influx of beef and pork but an anticipated tightening of supplies down the road, he said.

Gold Mixed

Live cattle settled 1.35 cents to 1.50 cents higher, with the contract for delivery in August at 64.15 cents a pound; feeder cattle were 0.70 cent to 1.23 cents higher, with the August contract at 71.55 cents a pound; live hogs were 1.28 cents to 1.50 cents higher, with July at 46.20 cents a pound, and frozen pork bellies were 0.85 cent to 2 cents higher, with July at 39.05 cents a pound.

Gold futures prices were mixed while silver rallied sharply in trading at the New York Commodity Exchange.

Bette Raptopoulos, an analyst with Prudential-Bache Securities Inc. in New York, said silver was supported by inflationary speculation stemming from the rally in soybeans and grains, while gold was depressed by the recent strength of the U.S. dollar.

Gold settled 10 cents lower to 10 cents higher, with the contract for delivery in June at $443 an ounce; silver was 13 cents to 13.6 cents higher, with June at $6.936 an ounce.

Energy futures prices retreated at the New York Mercantile Exchange.

Crude oil settled 11 cents to 19 cents lower, with the contract for delivery in August at $15.86 a barrel; heating oil was 0.18 cent to 0.55 cent lower, with July at 42.59 cents a gallon, and unleaded gasoline settled 0.38 cent lower to 0.14 cent higher, with July at 51.05 cents a gallon.

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