COMMODITIES : Speculators Boost Soybean Futures
Soybean futures prices registered their highest daily close since mid-July on Thursday on the Chicago Board of Trade after new drought-damage estimates sparked a speculative rally.
Wheat finished lower and corn futures were mixed.
On other markets, energy, precious metals and cocoa futures gained while livestock, meat and stock index futures declined.
The Agriculture Department won’t release new crop production estimates until Monday afternoon. But private predictions issued Thursday indicate that most analysts expect the USDA to again lower its estimates for the 1988 corn and soybean harvests.
The estimates of about 30 trading companies averaged 1.4 billion bushels of soybeans, 25% less than last year’s production of 1.9 billion bushels, and 4.2 billion bushels of corn, a 41% decline from last year’s 7.1 billion bushels.
Impressive Day
The USDA had estimated declines of 23% for soybeans and 37% for corn in its August crop production report.
Speculators gave the soybean market its initial push, then technical traders turned buyers based on the improved chart signals, analysts said.
Soybeans for November delivery, the first month for the new-crop beans, finished at $9.055 a bushel, the highest close for that contract since it settled at $9.27 on July 18.
“It was a pretty impressive day,” said Mario Balletto, soybean analyst in New York with Merrill Lynch Capital Markets.
Balletto said the strong soybean meal market provided additional support.
“The meal market is very bullish,” he said. “Prices are still too low and that’s certainly spilling over.”
The wheat market ended a six-day rally, settling lower on disappointment over slow export sales and reports that the Soviet Union was negotiating a large purchase of European wheat and barley, analysts said.
“We’re not the only ones they’re buying from and that’s kind of negative,” said Jerry Gidel, grain analyst in Chicago with the G. H. Miller division of LIT American Inc.
Oil Price Rumors
Wheat settled 2.5 cents to 5.5 cents lower, with September at $4.065 a bushel; corn was 1.25 cents lower to 0.75 cent higher, with September at $2.905 a bushel; oats were 2.75 cents to 3 cents lower, with September at $2.665 a bushel, and soybeans were 7 cents to 15 cents higher, with September at $8.895 a bushel.
Oil futures prices rebounded on the New York Mercantile Exchange after five straight days of declines that had left them at their lowest point in nearly two years.
Analysts said the increase was partly technical in nature and partly caused by a reassessment of the intentions of Saudi Arabia.
Prices had been knocked down this week by rumors that the Saudis were offering volume discounts to Japan. But stories Thursday contradicted those rumors and said any price cuts the Saudis offered to the Japanese would not be mirrored by price cuts elsewhere, said Bob Baker, an analyst at Prudential-Bache Securities Inc.
West Texas Intermediate crude oil settled 11 cents to 32 cents higher, with October at $14.48 a barrel; heating oil was 0.24 cent to 0.43 cent higher, with October at 41.87 cents a gallon, and unleaded gasoline was 0.25 cent lower to 0.40 cent higher, with October at 42.99 cents a gallon.
The advance in the oil market helped to boost the inflation-sensitive precious metals futures, with platinum leading the way.
Platinum settled $9.60 to $10.10 higher on the New York Mercantile Exchange, with October at $537.50 an ounce.
Cattle Futures Fall
On New York’s Commodity Exchange, gold was 60 cents to 70 cents higher, with October at $430.80 an ounce; silver was 6 cents to 7.2 cents higher, with September at $6.612 an ounce.
The battered cocoa market rebounded on reports that discussions between producer and consumer nation members of the International Cocoa Organization were centering on ways to support prices. Some analysts had expected the two-week meeting in London to accomplish nothing except to hasten the demise of the price stabilization group.
Cocoa settled $28 to $46 higher, with September at $1,219 a metric ton.
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