COMMODITIES : Weather Fears Lift Coffee Futures

Coffee futures prices rose sharply Thursday on New York’s Coffee, Sugar & Cocoa Exchange but analysts said fears of dry-weather damage to the Brazilian coffee crop--the main reason for the rally--were unrealistic.

Elsewhere, frozen pork belly futures soared the permitted daily limit; most livestock futures gained; copper and precious metals moved up; crop and energy futures were mostly higher, and stock index futures advanced.

The weather has been dry in Brazil, the world’s largest coffee-producing nation, but that’s not unusual, analysts said.

“They normally get barely any rainfall between May and August and the fact that they’ve had maybe a little less than barely any is really having very little impact on the crop,” said Sandra Kaul, coffee market analyst with Shearson Lehman Hutton Inc. in New York.

She said the Brazilian coffee crop would not enter its flowering stage--the next phase of development in which normal rainfall is essential--until mid-September.

Arthur Stevenson, coffee market analyst with Prudential-Bache Securities Inc. in New York, said the current dry spell might have reminded traders of a drought that damaged the Brazilian coffee crop in the fall of 1985.

Bid to Boost Prices

“I suppose some people are looking for a repeat performance but the market is anticipating something that hasn’t happened yet,” Stevenson said.

More likely, other analysts said, traders holding positions obligating them to buy coffee at a future date were talking up the possibility of drought damage in hopes of driving prices higher so they could sell at a profit.

Coffee for delivery in September settled 3.92 cents higher at $1.2209 a pound.

Frozen pork belly futures soared the daily 2-cents-a-pound limit on the Chicago Mercantile Exchange in a rally motivated by technical rather than supply-and-demand factors, analysts said.

“There’s still a big supply of bellies available and they’re moving right now, but they’re supposed to,” said Michael Murphy, an analyst in Chicago with Dean Witter Reynolds Inc.

The strong belly market supported hog futures while most cattle futures gained on reports of continued strength in the cash cattle markets, he said.

Live cattle were 0.30 cent lower to 0.47 cent higher, with August at 71.22 cents a pound; feeder cattle were 0.25 cent lower to 0.30 cent higher, with August at 82 cents a pound; hogs were 0.35 cent lower to 0.85 cent higher, with August at 47.40 cents a pound, and frozen pork bellies were 2 cents higher across the board, with August at 36.70 cents a pound.

Copper futures moved sharply higher on New York’s Commodity Exchange on supply concerns linked to a strike at the Sudbury, Ontario, facilities of the Canadian mining company Falconbridge Ltd., analysts said.

Gold Futures Gain

World inventories of copper have been fairly tight for more than a year. Although Falconbridge is not a major producer, any signs of further tightening tend to prod this “sleeping bull market,” said George Anagnos, an analyst with Thomson McKinnon Securities Inc.

Copper for September delivery settled 2.95 cents higher at 97.25 cents a pound.

Gold and silver futures advanced slightly in featureless trading on the Comex.

Gold was $1.20 to $1.40 higher, with October at $436.30 an ounce; silver was 2.4 cents to 2.8 cents higher, with September at $6.69 an ounce.

Grain and soybean futures closed mostly higher on the Chicago Board of Trade with support stemming from rumors that the Soviet Union was considering new purchases of U.S. corn, analysts said.

Traders continued to focus on export news instead of weather factors, said Ted Mao, grain specialist with Shearson Lehman Hutton.

“The market seems like it wants to be more responsive to the demand side right now,” he said.

Wheat settled 2 cents to 4.25 cents higher, with September at $3.9225 a bushel; corn was 2 cents lower to 3 cents higher, with September at $2.8775 a bushel; oats were 4 cents to 9.50 cents lower, with September at $2.61 a bushel, and soybeans were 3 cents lower to 4 cents higher, with August at $8.81 a bushel.

Oil futures prices closed mostly higher on the New York Mercantile Exchange in positioning ahead of the September crude oil contract’s expiration on Monday.

West Texas Intermediate crude oil was 7 cents lower to 10 cents higher, with September at $15.57 a barrel; heating oil was 0.10 cent to 0.22 cent higher, with September at 44.15 cents a gallon, and unleaded gasoline was 0.10 cent to 0.66 cent higher, with September at 47.28 cents a gallon.

Stock index futures advanced slightly on the Chicago Mercantile Exchange, where the contract for September delivery of the Standard & Poor’s 500 index settled 0.20 point higher at 261.45.

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