Copper futures prices soared again Wednesday, reaching life-of-contract highs for a second straight day and prompting New York Commodity Exchange officials to raise margin limits in a bid to discourage further price speculation.
"Three things are at work here--tight supply, a weak dollar and a little built-in inflationary expectation," said Jack Barbanel, senior vice president of futures trading at Gruntal & Co. in New York.
In other markets, grain and soybeans futures prices were mixed to mostly higher in choppy trading before the Thanksgiving holiday; hog futures were mostly higher, but cattle futures mostly lower; and crude oil futures dipped lower after trading in a narrow range, while the petroleum products notched small gains in the face of uncertainty about the coming winter.
"There's a sort of squeeze going on in copper . . . a sense there's too little to meet obligations," said Craig Sloane of Smith Barney, Harris Upham & Co. in New York.
"Raising the margin to half (the cost of the contract) should both discourage further speculation and foster an orderly liquidation of positions," he said.
Gold, Silver Advance
Because London remains the primary market for copper, the declining value of the dollar against the British pound has aided the metal's price run-up in New York.
Copper closed $4 to $6.10 higher, with the contract for November at $119 per pound. The contract highs stretched across the board.
Precious metals also gained, but not nearly as spectacularly. Gold was $1.50 to $2.20 higher, with November at $476.60 an ounce, and silver was 1 cent to 3.7 cents higher, with November at 692.8 cents an ounce.
Platinum was $1.60 to $4.25 higher, with the December contract at the New York Mercantile Exchange at $506.60.
At the Chicago Board of Trade, rumors of continuing Soviet grain purchases again figured prominently in both the grain and soybean trading pits.
Strong commercial house purchases in soybeans Tuesday suggested that the Soviet buying spree might continue--even though no new Soviet purchases have been announced since the more than 1 million tons they bought last week.
And when commercial house buying was seen again Wednesday, prices moved into positive territory.
Wheat Futures Decline
"Some people tried to take the market down, but when it refused and beat (Tuesday's) close, it moved up pretty quickly," said Barney Janecki, a trader with Dean Witter Reynolds in Chicago.
Wheat futures, meanwhile, opened slightly lower and never completely recovered because of profit taking and very light volume.
Wheat closed 0.04 cent lower to 0.50 cent higher, with the December contract at $3.01 a bushel; corn was 0.02 cent to 3.25 cent higher, with December at $1.8925 a bushel; oats were unchanged to 0.01 cent higher, with December at $2.06 a bushel, and soybeans were 1.25 cents lower to 6.25 cents higher, with January at $6 a bushel.
Livestock and hog futures prices were mixed on the Chicago Mercantile Exchange in a market one trader decribed as "drifting."
"This was a day of evening up," said Thomas Morgan of Sterling Research Corp. in Chicago. "Most people were on the sidelines."
Live cattle settled 0.15 cent lower to 0.25 cent higher, with December at 66.22 cents a pound; feeder cattle were 0.15 cent lower to 0.23 cent higher, with January at 75.55 cents a pound; hogs were 0.18 cent lower to 0.10 cent higher, with December at 44.90 cents a pound, and frozen pork bellies were 0.82 cent lower to 0.05 cent higher, with February at 56.05 cents a pound.