COMMODITIES : Grain Futures Mixed as Traders Wait for Crop Report

The government’s new crop-production estimates, only slightly lower than predictions made a month ago, surprised many grain market analysts and should trigger a drop in corn and soybean futures prices, experts said Monday.

Grain and soybean futures settled mixed Monday on the Chicago Board of Trade in light trading ahead of the Agriculture Department’s report. Soybeans were lower, wheat was higher and corn futures were mixed.

On other markets, energy futures finished higher in a volatile session; precious metals were lower; livestock and meat futures were mixed, and stock index futures retreated slightly.

The USDA estimated 1988 U.S. corn production at 4.46 billion bushels, compared to its August estimate of 4.48 billion bushels. The agency pegged the soybean crop at 1.47 billion bushels, virtually unchanged from last month. And the USDA predicted a wheat harvest of 1.81 billion bushels, compared to August’s estimate of 1.82 billion.

Although the numbers reflect severe drought damage and represent sharp reductions from last year’s harvest--37% less corn, 23% fewer soybeans and 14% less wheat--they were more optimistic than the market had anticipated and so were expected to exert downward pressure on prices, especially in soybeans and corn.

“I think corn will be down 3 to 4 cents, beans 10 cents or so, maybe even more,” said Victor Lespinasse, a trader with Dean Witter Reynolds Inc. in Chicago.

Other traders said soybean futures prices could drop as much as 20 cents a bushel at today’s opening.

Cathy Leow, vice president of grain futures trading with Thomson McKinnon Securities Inc. in New York, said spot-market sales of corn and soybeans linked to the advancing harvest already were weakening the futures markets.

“Between the numbers and the harvest, it probably means the market’s not going higher in the short run,” she said. “We may just move sideways for awhile. We won’t go higher, we won’t go lower, we’ll trade in a range.”

For the wheat market, which has shown some vigor recently on expectations of rising export demand, the USDA report also had some bullish news.

The government reduced its projection for 1988-89 Soviet grain production by 5 million metric tons to 205 million and raised its projected Soviet grain imports estimate to 27 million metric tons from 25 million.

Wheat settled 1 cent to 2.25 cents higher, with the contract for delivery in September at $4.0225 a bushel; corn was 1 cent lower to 0.50 cent higher, with September at $2.86 a bushel; oats were 2 cents lower to 3 cents higher, with September at $2.61 a bushel, and soybeans were 11.5 cents lower to 0.50 cent higher, with September at $8.705 a bushel.

Precious metals futures finished slightly lower on New York’s Commodity Exchange but well above the day’s lows.

Gold settled 30 cents to $1.60 lower, with October at $422.80 an ounce; silver was 0.30 cent to 1.2 cents lower, with September at $6.437 an ounce.

Livestock and meat futures were narrowly mixed on the Chicago Mercantile Exchange.

Live cattle were 0.60 cent lower to 0.12 cent higher, with October at 69.72 cents a pound; feeder cattle were 0.20 cent lower to 0.10 cent higher, with September at 79.65 cents a pound, and hogs were 0.13 cent lower to 0.20 cent higher, with October at 37.92 cents a pound.

The contract for September delivery of the Standard & Poor’s 500 stock index on the Chicago Mercantile Exchange settled 0.60 point lower at 266.15.