COMMODITIES : Cotton Futures Soar Over Hurricane Fears

Cotton futures prices soared Tuesday on the New York Cotton Exchange on fears that heavy rains from Hurricane Gilbert could damage the cotton crop in central and western Texas.

On other markets, prices for future delivery of oil and oil products, grains, soybeans, copper, gold, silver and livestock all finished higher. Stock index futures also advanced.

Gilbert was heading toward Mexico’s Yucatan Peninsula on Tuesday after devastating Jamaica and the Dominican Republic.

Some cotton traders feared that strong winds and rain from the savage storm would reach deep into Texas.

“They know it will go into the Gulf of Mexico tomorrow and move into the south Texas coastal areas,” said Ernest Simon, cotton specialist with Prudential-Bache Securities Inc. in New York.

Simon said traders feared the storm would strike land between Tampico, Mexico, and Corpus Christi, Tex., turn north and pour rain on cotton fields in the state’s central and western portions.

If that happens, he said, “it will lower the grade, it may even cause some loss.”

Despite the heavy buying prompted by Gilbert’s approach, Simon said the loss of even 500,000 bales of cotton would have little effect on the glutted cotton market.

Oil Higher

Earlier this week, the Agriculture Department estimated that stocks of cotton next July 31, the end of the current marketing year, would total 8.2 million bales, compared to 5.6 million bales at the end of the 1987-88 year.

“If this storm does something, it is meaningless in the overall context of the cotton crop we have,” Simon said. “We still have a huge surplus of cotton.”

Cotton settled 1.24 cents to 1.55 cents higher, with the contract for delivery in October at 55.49 cents a pound.

Fears that Gilbert could force a temporary halt to gasoline production at oil refineries in the Gulf helped spur energy futures to higher levels on the New York Mercantile Exchange, analysts said.

West Texas Intermediate crude oil settled 7 cents to 12 cents higher, with October at $14.56 a barrel; heating oil was 0.12 cent to 0.15 cent higher, with October at 41.83 cents a gallon, and unleaded gasoline was 0.02 cent to 1.19 cents higher, with October at 43.81 cents a gallon.

Grain and soybean futures prices finished mostly higher on the Chicago Board of Trade as strength from the buoyant wheat market spilled over into the corn and soybean pits.

Grain Supplies Tight

Corn and soybean futures had opened lower in reaction to higher-than-expected harvest estimates for those crops contained in an Agriculture Department report released Monday.

The USDA’s wheat production estimate also was higher than expected, but wheat futures prices rallied on the report’s predictions of declining Soviet and Canadian wheat production and increasing Soviet grain imports, analysts said.

With potential crop-weather problems developing in South America and severe crop losses a hard fact in the United States and Canada, “the world situation is still tight” said Ted Mao, grain specialist with Shearson Lehman Hutton Inc. in New York.

Wheat settled 3 cents to 9.75 cents higher, with September at $4.11 a bushel; corn was 0.50 cent lower to 3 cents higher, with September at $2.855 a bushel; oats were 2 cents to 4 cents higher, with September at $2.65 a bushel, and soybeans were 5.5 cents to 11 cents higher, with September at $8.76 a bushel.

Stock index futures advanced modestly on the Chicago Mercantile Exchange, where the contract for September delivery of the Standard & Poor’s 500 index settled 1.85 points higher at 268.