COMMODITIES : Peru Miners Strike Sends Copper Higher

Copper futures prices climbed sharply Tuesday on New York’s Commodity Exchange amid renewed fears of tight supplies linked partly to a miners strike in Peru, the world’s seventh-largest copper producer.

On other futures markets, precious metals were slightly lower, cattle posted steep declines while pork futures were mixed, grains and soybeans were mostly lower, and stock index futures advanced.

Reports that as many as half of Peru’s 70,000 metals miners were on strike fueled a late rally in the copper market, analysts said. The contracts for both spot and December delivery hit new life-of-contract highs for the 10th time in the past 12 sessions.

Copper for spot delivery settled at $1.38 a pound, up 3.9 cents from Monday, while the contract for delivery in December rose 3.2 cents to $1.246 a pound.

The market opened steady and traded on a fairly even keel for most the session in light of Monday’s report that London Metal Exchange supplies had fallen last week by 4,550 metric tons instead of the expected 7,000- to 9,000-ton decline, analysts said.

Nevertheless, “LME stocks continued their downtrend and probably will continue to decline,” said Fred Demler, metals economist with Drexel Burnham Lambert Inc.

“Inventories are critically low; consumption remains good in Japan, parts of Europe and the United States, and production has faltered a bit as of late,” he said.

“The only thing that’s negative in the copper market right now is that it’s due for a technical correction--it’s moved up much too fast,” Demler said.

Gold and silver futures dipped in reaction to a reversal of recent trends toward a weaker dollar and lower prices for crude and other commodities, Demler said.

Gold settled $2 to $4 lower, with December at $415.10 an ounce; silver was 5 cents lower across the board, with December at $6.425.

Cattle futures prices fell sharply on the Chicago Mercantile Exchange on profit taking after Monday’s advance to life-of-contract highs for all delivery months.

The cattle market had rallied on expectations for higher cash markets and speculation that the Agriculture Department’s quarterly cattle-on-feed report, due out after the close Friday, will show a significant reduction in cattle being fattened for slaughter.

Live cattle settled 0.35 cent to 1.15 cents lower, with October at 72.27 cents a pound; feeder cattle were 0.10 cent to 1.07 cents lower, with October at 81.80 cents a pound; live hogs were 0.07 cent lower to 0.25 cent higher, with October at 39.90 cents a pound, and frozen pork bellies were 0.18 to 0.57 cent lower, with February at 48.77 cents a pound.

Grain and soybean futures finished mostly lower on the Chicago Board of Trade, reflecting the weak tone of the grain export business, analysts said.

Corn harvesting was 63% complete as of Sunday in the top 17 producing states, while soybean harvesting was 90% finished in the top 19 producing states.

Wheat settled 1 cent to 7.25 cents lower, with December at $4.23 a bushel; corn was 2.75 cents lower to 1 cent higher, with December at $2.92.25 a bushel; oats were 0.50 cent lower to 2.5 cents higher, with December at $2.575 a bushel, and soybeans were 2 to 5.5 cents lower, with November at $8.055 a bushel.

Stock index futures posted strong gains on the Chicago Merc, where the contract for December delivery of the Standard & Poor’s 500 index settled 2.95 points higher at 281.10