COMMODITIES : Higher Supplies Send Copper Plunging
Copper futures prices fell steeply Monday on New York’s Commodity Exchange after the exchange reported the first increase in nearly a month in deliverable supplies of the metal.
On other markets, precious metals mostly were lower; livestock and meat futures moved sharply higher; energy futures were mixed; grains and soybeans were mixed, and stock index futures fell.
Copper settled 1 cent to 4.40 cents lower on the Commodity Exchange, with the spot contract for delivery in December at $1.585 a pound and the more actively traded March contract at $1.352.
Daily increases in the amount of warehoused copper registered with the Commodity Exchange have been rare since October, 1987, when the Comex copper inventory stood at nearly 90,000 short tons.
Late last week, the exchange reported that warehouse stocks had dropped to 5,204 tons and copper for December delivery on the exchange soared to an all-time high of $1.6475 a pound.
But copper traders who had expected the trend to continue were shocked Monday morning when the Comex reported that warehouse stocks had risen to 6,545 tons, a 24% increase from last week’s tally.
“That was an unpleasant surprise to the market,” said Craig Sloane, metals analyst with Smith Barney, Harris Upham & Co.
The Comex last reported an increase in copper stocks Nov. 17.
Meanwhile, the world’s other major copper futures market, the London Metal Exchange, reported a 1,925-ton decline in its warehouse stocks of copper, which was a smaller decrease than traders had expected, Sloane said.
Platinum futures prices fell sharply in a technically inspired selloff, dragging gold prices lower as well, but silver futures were mixed, analysts said.
On the New York Mercantile Exchange, platinum settled $8.60 to $11.10 lower, with January at $589.10 an ounce. On the Comex, gold settled $2.80 to $3.10 lower, with February at $424.60 an ounce, and silver was 0.7 cent lower to 0.4 cent higher, with March at $6.298 an ounce.
Pork futures rose strongly on the Chicago Mercantile Exchange on speculation that last week’s drop in slaughters meant hog kills had passed their seasonal peak, said Dale Durchholz, an analyst with Agri-Visor Services Inc. of Bloomington, Ill.
Strong retail demand and the arrival of wintry conditions in the Midwest also contributed to the advance in pork futures, he said.
“Farmers just have not been willing to move hogs with the kind of temperatures we’ve had because it stresses them a little more,” Durchholz said.
Cattle futures rallied in sympathy with the pork complex and in reaction to renewed demand, he said.
Live cattle settled 0.25 to 0.60 cent higher, with December at 72.42 cents a pound.
