Prices of grain and soybean futures rallied Tuesday at the Chicago Board of Trade, bolstered by strong demand for soy meal and optimism that a U.S.-Soviet grain agreement is near.
On other markets, coffee prices fell further, gold prices rallied, oil prices reversed their decline, live cattle and hog prices gained and feeder cattle and pork bellies were mostly lower.
Soy meal remains the underlying strength in the soy market and helped soybean prices close sharply higher, said Joel Karlin, an analyst for Research Department Inc. in Chicago.
Domestic demand remains high for soy meal, and tight supplies as well as an anticipated increase in exports helped keep prices firm, he said.
Export demand also encouraged buying in the corn pit, Karlin said.
Wheat settled 0.25 cent to 2.25 cents higher, with the contract for delivery in December at $4.225 a bushel; corn was 0.50 cent lower to 4.5 cents higher, with December at $2.945 a bushel; oats were 1.5 cents lower to 1 cent higher, with December at $2.4925 a bushel, and soybeans were 11 to 13.5 cents higher, with November at $8.28 a bushel.
At New York’s Coffee, Sugar & Cocoa Exchange, coffee prices continued to feel pressure from the International Coffee Organization’s compromise plan for 1988-89.
The plan, which includes an initial export quota of 58 million bags, allows concessions for producers of mild coffee--the kind traded at the New York exchange--and is expected to increase availability, said Kim Badenhop, an analyst with Merrill Lynch Capital Markets Inc.
The plan announced over the weekend calls for a 2-million-bag reduction, but traders had expected a quota of about 54 million bags, Badenhop said.
Gold, Silver Advance
Coffee settled 1.89 to 6 cents lower, with the contract for delivery in December at $1.244 a pound.
Gold futures prices were higher and silver was mostly higher at the New York Commodity Exchange.
Both responded to the higher crude oil price, which had been down sharply for several days, said Bette Raptopoulos, a metals analyst with Prudential-Bache Securities Inc. in New York.
The dollar’s weakness and the gains in grains and soybeans--both causing a rise in inflationary expectations--also supported gold prices, she said.
Gold was 30 to 60 cents higher, with October at $398.10 an ounce; silver was 0.1 cent lower to 0.2 cent higher, with October at $6.248 an ounce.
Crude oil futures steadied in trading at the New York Mercantile Exchange after their plunge in the previous two sessions. But analysts said concerns about oversupply remained the underlying factor in the market and that helped temper gains.
Crude oil settled 1 cent to 32 cents higher, with the contract for delivery in November at $13.07 a barrel; heating oil was 0.59 cent lower to 0.39 cent higher, with November at 38.17 cents a gallon, and unleaded gas was 0.87 cent lower to 0.10 cent higher, with November at 41.11 cents a gallon.
Live cattle and hog prices rallied, while feeder cattle and pork bellies were mostly lower.
Early Gains Evaporate
Higher cash bids from meatpackers for live cattle and hogs sparked a buying spree in the cattle and hog pits and had a spillover effect on pork belly prices through the middle part of the session, said Chuck Levitt, analyst for Shearson Lehman Hutton Inc. in Chicago.
But “early buyers turned out to be late sellers,” he said, and profit taking later near the session’s close eased earlier gains.
Live cattle settled 0.07 to 0.50 cent higher, with the contract for delivery in October at 72.42 cents a pound; feeder cattle were 0.42 cent lower to 0.25 cent higher, with October at 82.15 cents a pound; hogs were 0.23 to 0.67 cent higher, with October at 39.87 cents a pound, and pork bellies were 0.37 cent lower to 0.93 cent higher, with February at 49.95 cents a pound.