COMMODITIES : Rain Sends Grain, Soybean Futures Plunging

Soybean, corn and oat futures prices plummeted their permitted daily limits Monday on the Chicago Board of Trade in reaction to heavy showers in Iowa and slack foreign demand for U.S. grain and soybean products.

Wheat futures also closed sharply lower.

On other markets, livestock and meat futures fell, platinum posted sharp gains to lead precious metals futures higher, energy futures were mixed and stock index futures retreated.

Rain was moving east Monday into the central Corn Belt, where a summer-long drought has severely damaged the corn and soybean crops. But analysts said the rain and cooler temperatures were coming too late to greatly benefit the crops; corn plants passed their most vulnerable period in mid-July and most of the soybean crop is past the critical pod-setting stage.

“The rain was the catalyst” for the selloff in the grain futures market, said Victor Lespinasse, a trader for Dean Witter Reynolds Inc.

Corn and oat futures were limited to daily moves of 10 cents a bushel. The wheat limit was 15 cents and the soybeans were limited to moves of 30 cents a bushel except for the expiring August soybean contract, which had no limit.

Monday marked the 10th consecutive week in which soybean futures have advanced or declined the limit on the first trading day of the week.

Wheat settled 7.75 cents to 11 cents lower, with the contract for delivery in September at $3.81 a bushel; corn was 3.75 cents to 10 cents lower, with September at $2.7725 a bushel; oats were 10 cents lower across the board, with September at $2.49 a bushel, and soybeans were 23.50 cents to 32.50 cents lower, with August at $8.37 a bushel.

Holiday a Factor

Cattle futures posted steep losses on the Chicago Mercantile Exchange on expectations that cash prices would fall later this week as demand declines, analysts said.

“We’re coming into Labor Day and most of the buying for the Labor Day holiday has been completed, so there is expected to be some slackening of demand as result,” said Thomas Morgan, president of Sterling Research Corp., of Arlington Heights, Ill.

Pork futures prices declined on speculation that the cooler weather in the Midwest would result in farmers bringing more hogs to market, Morgan said.

The frozen pork belly market received some potentially bullish news after the close. The Agriculture Department’s monthly cold-storage report showed 73.7 million pounds of pork bellies in cold storage on Aug. 1. The number, while much higher than last year’s 28.6 million pounds on the same date, was below market estimates, Morgan said.

Live cattle settled 0.65 cent to 1.38 cents lower, with October at 70.70 cents a pound; feeder cattle were 0.55 cent to 1.32 cents lower, with August at 81.55 cents a pound; hogs were 0.50 cent to 1.20 cents lower, with October at 40.37 cents a pound, and frozen pork bellies were 0.55 cent to 1.93 cents lower, with August at 36.25 cents a pound.

Platinum futures leaped more than $11 an ounce in fairly active trading on the New York Mercantile Exchange on strong technical signals, analysts said.

Gold and silver futures followed on New York’s Commodity Exchange, ignoring the normally bearish input of weaker grain futures and foreign currency markets, said Craig Sloane, precious metals analyst with Smith Barney, Harris Upham & Co.

Energy Futures Rise

Platinum settled $11 to $11.50 higher, with October at $546.20 an ounce; gold was $1.80 to $1.90 higher, with October at $437.40 an ounce, and silver was 7 cents to 8 cents higher, with September at $6.74 an ounce.

Energy futures prices closed mostly higher Monday in quiet trading on the New York Mercantile Exchange. Analysts said the market was driven by mainly technical factors.

West Texas Intermediate crude oil settled 4 cents lower to 6 cents higher, with September at $15.76 a barrel; heating oil was 0.16 cent to 0.26 cent higher, with September at 44.73 cents a gallon, and unleaded gasoline was 0.07 cent lower to 0.15 cent higher, with September at 47.52 cents a gallon.

Stock index futures retreated on the Chicago Mercantile Exchange on fears of higher interest rates. The contract for September delivery of the Standard & Poor’s 500 index finished 5.35 points lower at 256.60.

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