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COMMODITIES : Copper Futures Close at New High as Recession Fears Abate

December 22, 1987|From Associated Press

Copper futures surged Monday on the Commodity Exchange in New York, with some contracts hitting new highs as fears of a recession in early 1988 receded, analysts said.

On other markets, precious metals were mixed; soybeans advanced sharply while futures prices for grains, livestock and meat, crude oil and oil products were mixed. Stock index futures advanced.

The contract for March delivery of copper settled at a new high of $1.179 a pound, reducing from 19.2 cents to 13 cents the gap between March and the higher-priced December contract--a key indicator of anticipated supply and demand.

December had built up a huge premium to March as users scrambled to secure tight supplies. But usage had been expected to decline early next year along with the economy, partly because of the October collapse of stock prices, said Steve Chronowitz, director of futures research for Smith Barney, Harris Upham & Co. in New York.

"We're now seeing March come in stronger relative to December because . . . the general feeling among users is that prices and the economy will remain strong well into the first quarter," Chronowitz said.

The January contract also hit a new high at $1.295 a pound. Both the January and March contracts gained 4.10 cents, while the contract for December delivery advanced 3.2 cents to settle at $1.31 a pound.

Gold retreated marginally on the Comex in quiet trading while silver advanced slightly.

Gold settled 20 cents to 30 cents lower, with December at $479.60 an ounce; silver was 2.7 cents to 3 cents higher, with December at $6.797 an ounce.

Soybean futures soared as much as 11 cents a bushel on the Chicago Board of Trade, while grain futures were mixed.

The soybean complex advanced on high prices for imported palm oil, said Barney Janecki, a trader for Dean Witter Reynolds Inc.

The higher price of palm oil could increase demand for soybean oil, which can be substituted for the imported oil.

Wheat closed mostly lower because of profit taking early in the session, Janecki said.

Corn trading was sluggish, with prices for most contracts moving in a narrow range throughout the session.

The Agriculture Department announced after the close that China had bought 510,000 metric tons of U.S. wheat in addition to 570,000 metric tons it had purchased earlier under the USDA's Export Enhancement Program.

Wheat settled 1 cents lower to 1 cent higher, with December at $3.10 3/4 a bushel; corn was 1/2 cent lower to 2 cents higher, with December at $1.79 1/2 a bushel; oats were 3/4 cent lower to 1 1/2 cents higher, with December at $2.05 a bushel; soybeans were 8 cents to 11 cents higher, with January at $6.01 3/4 a bushel.

Livestock and meat futures were mixed on the Chicago Mercantile Exchange.

Cattle futures retreated on concern that weather-related delays in bringing cattle to market this month would result in higher marketings next month, said Tom Morgan, president of Sterling Research Corp. in Chicago.

Hog futures advanced on stronger cash prices, but frozen pork bellies declined on expectations that the USDA's cold-storage report--which was issued after the close--would show aggressive warehousing of bellies, analysts said. The USDA reported 35.6 million pounds of pork bellies in storage as of Nov. 30, close to the number anticipated by the trade, Morgan said.

Frozen pork bellies set new contract lows Monday of 50.30 cents a pound for February and 50.40 cents a pound for March.

Live cattle settled 0.60 cent lower to 0.20 cent higher, with February at 61.57 cents a pound; feeder cattle were 0.20 cent to 0.43 cent lower, with January at 74.95 cents a pound; live hogs were 0.10 cent lower to 0.40 cent higher, with February at 42.15 cents a pound; frozen pork bellies were 0.07 cent to 0.68 cents lower, with February at 50.50 cents a pound.

Crude oil futures retreated slightly on the New York Mercantile Exchange while the products advanced.

West Texas Intermediate crude oil settled 2 cents to 42 cents lower, with January at $15.16 a barrel; wholesale heating oil was .10 cent to .62 cent higher, with January at 49.35 cents a gallon; wholesale unleaded gasoline was .11 cent to .34 cent higher, with January at 41.28 cents a gallon.

Stock index futures advanced on the Chicago Mercantile Exchange, with the contract for March delivery of the Standard & Poor's 500 index settling 3.9 points higher at 252.35. The underlying spot index closed at 249.54.

Tables, Page 10

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