COMMODITIES : Wheat Rises on Hopes for Chinese Deal

A rumored Chinese plan to buy U.S. wheat and talk that the Common Market plans to raise its wheat export prices triggered a rally in prices of wheat futures Thursday at the Chicago Board of Trade.

In other markets, corn prices advanced, soybeans declined, cattle prices were mostly higher, hog prices were mostly lower, frozen pork bellies declined, gold advanced, silver was lower and oil prices dipped.

Wheat prices hit new contract highs amid continued hope for a Chinese purchase and the rumors of the Common Market’s plans, according to Victor Lespinasse, a trader with Dean Witter Reynolds Inc.

Higher export prices of Common Market wheat “would make theirs less competitive and ours more competitive,” he said.

Rumors that the Soviet Union bought 1 million tons of corn sparked a buying wave in the corn pit, Lespinasse said.

Soybean prices were pressured by bearish crop estimates from an influential private commodities analyst, Lespinasse said.

Wheat settled 3.75 to 6.5 cents higher, with the December contract at $4.3275 a bushel, and corn was 0.50 cent to 4.5 cents higher, with December at $2.98 a bushel.

In other grain trading, oats were 2 cents lower to 0.5 cent higher, with December at $2.4625 a bushel, and soybeans were 10.25 cents lower to 2.75 cents higher, with the November contract closing at $8.1275 a bushel.

Cattle prices surged at the Chicago Mercantile Exchange, where traders bought on speculation that supplies will tighten in the fourth quarter. They seemed to ignore near-term fundamentals of lackluster boxed beef sales and slow feed-yard trade--both indications that demand is slight, said Philip Stanley, an analyst in Chicago with Thompson McKinnon Securities Inc.

The hog market fell under the influence of lower cash hog prices, while pork bellies were pressured because of large stocks in storage, Stanley said.

Cattle Prices Steady

Cattle prices settled unchanged to 0.57 cent higher, with October at 72.47 cents a pound; feeder cattle were 0.07 cent lower to 0.43 cent higher, with October at 81.77 cents a pound; hogs were 0.38 cent lower to 0.10 cent higher, with October at 40.02 cents a pound, and pork bellies were 0.20 to 0.78 cent lower, with February at 48.67 cents a pound.

Gold prices at the New York Commodity Exchange rallied on expectations that Labor Department figures to be released today would show an improved job picture for September, said analyst Jack Barbanel of Gruntal & Co. in New York.

A slight stabilization in crude oil prices, which have plunged lately, was also considered slightly bullish, he said.

Gold was $2.70 to $3.10 higher, with the contract for delivery in October at $403.80 an ounce; silver was 1 cent to 1.5 cents lower, with October at $6.288 an ounce.

Prices of oil futures settled mostly lower after a rally on mostly technical factors earlier in the session at the New York Mercantile Exchange.

The November contract for West Texas Intermediate rose 6 cents to settle at $12.66 a barrel, but other contract months settled as much as 15 cents lower. The near-term contract for the benchmark crude had been up as much as 30 cents during the session.

Among refined products traded on the exchange, the November contract for wholesale unleaded gasoline rose 0.06 cent to settle at 39.50 cents a gallon, while home heating oil slipped 0.52 cent to 37.24 cents a gallon. Other contract months finished lower.