COMMODITIES : Cocoa Soars on Rumors of Soviet Buying

Cocoa futures prices soared nearly 7% Friday on New York’s Coffee, Sugar & Cocoa Exchange in a rally led by trade houses amid rumors of a large cocoa purchase by the Soviet Union.

On other markets, orange juice futures fell sharply; precious metals made strong gains; energy futures lost ground; grains and soybeans were lower; livestock and meat futures were mixed, and stock index futures retreated.

Cocoa settled $77 to $94 higher, with the contract for delivery in March at $1,461 a metric ton. A metric ton is 2,205 pounds.

The rally was rooted in a surge of physical cocoa buying overseas, some of which was attributed to the Soviet Union, although analysts had their doubts.

“I’m a little skeptical as to thinking the Russians would come into the market in such an unsophisticated fashion as to drive the price up in a big way,” said Kim Badenhop, an analyst with Merrill Lynch Capital Markets Inc. in New York.

“I emphasize my own skepticism,” echoed analyst Arthur Stevenson of Prudential-Bache Securities Inc. in New York, “but, nevertheless, that’s one of the things we heard.”

Juice Futures Sag

The rally occurred against the backdrop of a meeting in London of the International Cocoa Organization. The cocoa cartel is seeking a means for stabilizing prices, which have been in a downward trend because of a glut of cocoa following four years of excess production.

Futures prices for frozen concentrated orange juice plummeted on the New York Cotton Exchange in reaction to news that a large Brazilian orange juice processor had cut its price to wholesalers by nearly 19% to $1.50 a pound.

Orange juice settled 2 cents to 4.55 cents lower, with March at $1.4095 a pound.

The silver futures market shook off its recent weakness and climbed sharply on New York’s Commodity Exchange, reflecting renewed concerns about inflation, analysts said.

Silver for spot delivery fell below $6 an ounce early this month and the low price apparently has attracted some buyers, said Sharon Ziemian, an analyst with Citibank in New York.

“For some years now, silver has always been a good buy under $6,” she said.

Gold futures also climbed, borrowing some of their strength from silver, she said.

Gold settled $4.80 to $5.10 higher, with February at $409.30 an ounce; silver was 20.7 cents to 22.5 cents higher, with March at $6.245 an ounce.

Energy futures plunged on the New York Mercantile Exchange on weakening chart signals and profit taking after a strong rally earlier in the week.

West Texas Intermediate crude oil settled 27 to 42 cents lower, with February at $18.86 a barrel; heating oil was 0.60 cent to 1.15 cents lower, with February at 52.60 cents a gallon, and unleaded gasoline was 0.32 cent to 1.08 cents lower, with February at 51.78 cents a gallon.

Soybean futures prices fell sharply on the Chicago Board of Trade on selling linked to an improving supply outlook. Grain futures finished narrowly mixed.

Last week’s Agriculture Department crop report showing larger than expected soybean supplies continued to weigh on the market, and reports of improved growing conditions in South America added to the bearish price outlook, analysts said.

Wheat settled 1/4 cent lower to 2.25 cents higher, with March at $4.45 a bushel; corn was unchanged to 1 cent lower, with March at $2.6775 a bushel; oats were unchanged to 3 cents lower, with March at $2.34 a bushel, and soybeans were 10.75 to 15 cents lower, with March at $7.505 bushel.

Cattle futures fell moderately while pork futures finished mixed on the Chicago Mercantile Exchange.

Live cattle were 0.15 to 0.30 cent lower, with February at 72.70 cents a pound; feeder cattle were 0.15 to 0.58 cent lower, with January at 84 cents a pound; live hogs were 0.35 cent lower to 0.10 cent higher, with February at 43.85 cents a pound, and frozen pork bellies were 0.85 cent lower to 0.30 cent higher, with February at 40.25 cents a pound.

Stock index futures retreated slightly on the Chicago Mercantile Exchange, where the contract for March delivery of stocks represented by the Standard & Poor’s 500 index settled 0.50 point lower at 288.75. The contract is worth $500 a point.

Tables, Page 5