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FINANCIAL MARKETS : Commodities : Rumors of Grain Sales to Soviets Boost Prices

October 09, 1987|From Associated Press

Wheat futures prices spurted higher Thursday on rumors, later denied, that the United States would offer to subsidize a large sale of grain to the Soviet Union.

Other grain and soybean futures also advanced on the Chicago Board of Trade.

On other markets, precious metals climbed out of the doldrums to settle modestly higher; livestock and meat futures were mixed, and energy futures were mostly lower.

The price of the nearby December wheat contract briefly rose as much as 9.5 cents a bushel from Wednesday's close on rumors that the Agriculture Department planned to offer up to 4.7 million tons of wheat to the Soviet Union under the U.S. export bonus program, analysts said.

The market pulled back after USDA said it planned no such announcement Thursday, then recovered some of the gains in a late rally.

The strength in wheat supported corn prices, while soybeans rose in anticipation of a bullish October crop production report, said Joel Karlin, an analyst in Chicago for Research Department Inc.

Karlin said many traders expected USDA to reduce its estimate for the Soviet grain harvest in the report issued after Thursday's close.

Instead, the government increased its Soviet harvest estimate to 210 million metric tons from 205 million, a number analysts called neutral to slightly bearish.

USDA estimated the 1987 U.S. corn harvest at 7.136 billion bushels, down from the September estimate of 7.141 billion and lower than the average analyst's estimate of 7.143 billion.

If the estimate holds true, the nation's corn harvest would be the smallest since 1983.

The government estimated the U.S. soybean harvest at 1.968 billion bushels, up slightly from the September estimate of 1.957 billion, and near the average analyst's estimate, also 1.957 billion.

Wheat settled unchanged to 7.25 cents higher with the contract for delivery in December at $3.0425 a bushel; corn was unchanged to 2 cents higher with December at $1.8475 a bushel; oats were 1.75 cents to 2.50 cents higher with December at $1.8425 a bushel; soybeans were 0.50 cent to 3.75 cents higher with November at $5.4325 a bushel.

Gold and silver futures advanced on the Commodity Exchange in New York due to uncertainty about the U.S. economy.

Gold settled $3.10 to $5 higher with October at $461.40 an ounce; silver was 18.5 cents to 22.4 cents higher with October at $7.845 an ounce.

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