A sharp decline in stocks of soybeans and corn reported by the Agriculture Department on Thursday should spark a buying binge in futures traded at the Chicago Board of Trade today, traders said.
Thursday's trading in grain and soybean futures was quiet ahead of the report on stocks as of Dec. 1.
But the market should react sharply today to the estimate of soybean stocks of 1.76 billion bushels, which was about 100 million bushels below what traders were expecting.
"How you gonna keep 'em down on the farm after they've seen these numbers?" asked Vic Lespinasse, grains analyst with Dean Witter.
"I was calling soybean (futures) 10 cents higher, but now some are calling it 10 to 15 higher," Lespinasse said.
The government estimated last year's soybean crop at 1.90 billion bushels, compared to 1.95 billion estimated in its November crop report.
On other markets, energy futures advanced sharply; gold futures surged; livestock and meat futures were mostly higher, and stock index futures moved higher.
Merrill Lynch grains analyst David Bartholomew said the unexpected drop in the soybean estimate might revive criticisms of USDA crop reports.
"It tells you something is wrong with their reporting procedure," he said, citing private reports of higher bean yields in areas where the government lowered its forecast.
Cocoa Prices Slump
In New York, the cocoa futures market responded to reports from London where participants in the International Cocoa Organization were stymied in their attempt to draw up an agreement.
Prices fell following reports that leading producer Ivory Coast had blocked progress to an accord that would withhold cocoa supplies from the glutted market. However, an agreement was still possible, according to some negotiators, and cocoa futures prices edged up from the lowest levels made early.
March cocoa settled $28 lower at $1,866 a ton after rebounding from a low of $1,845.
Precious metals traders awaited today's U.S. trade deficit number for November.
Gold settled $6.60 to $6.90 higher, with the contract for delivery in March at $490.80 an ounce; silver was 9 cents to 9.4 cents higher, with March at $6.935 an ounce.
All livestock and meat futures except frozen pork bellies advanced on the Chicago Mercantile Exchange.
Beef futures gained on expectations that the next monthly and quarterly cattle-on-feed reports would show a decline in the number of cattle being fattened for slaughter, said Chuck Levitt, an analyst in Chicago for Shearson Lehman Bros.
Stock index futures advanced on the Chicago Mercantile Exchange. The contract for March delivery of the Standard & Poor's 500 index settled 1.20 points higher at 247.45.
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