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COMMODITIES : Rain Outlook Holds Crop Futures in Check

July 28, 1988|From Associated Press

Jitters about next week's weather held crop futures prices in check Wednesday on the Chicago Board of Trade, where corn prices fell, soybeans were mixed and wheat was higher.

On other markets, coffee futures plummeted; sugar fell sharply; precious metals were higher; livestock and meat were mixed; energy futures advanced, and stock index futures retreated.

Chicago grain and soybean futures traded higher for most of the session in a technical rebound following seven days of generally falling prices linked to improved crop conditions in the Midwest.

But late in the session a rumor surfaced that the National Weather Service's new 6-to-10-day forecast would predict normal rainfall in the region during the middle of next week, said Victor Lespinasse, a trader with Dean Witter Reynolds.

The rumor was correct. The forecast, released about 1 1/2 hours after the close, called for above-normal temperatures and normal rainfall in most of the Midwest for five days starting Tuesday.

"Today, people started selling when they heard that rumor and down we went," Lespinasse said.

The price rise earlier in the day reflected bargain-basement buying after the sharp break in prices--particularly for soybeans--during the past seven days, analysts said. Soybeans for August delivery had tumbled nearly $2.40 during that period to a nine-week low of $7.555 a bushel.

Wheat Prices Advance

"This market has undergone significant damage and I think people now will be more inclined to buy on the breaks," said Rich Feltes, grains analyst with Refco Inc., a large Chicago-based commodity trading firm.

Wheat settled 4 cents to 10.25 cents higher, with the contract for delivery in September at $3.615 a bushel; corn was 8.5 cents lower to 2.5 cents higher, with September at $2.798 a bushel; oats were 4.5 cents to 8 cents higher, with September at $2.49 a bushel, and soybeans were 2 cents lower to 17 cents higher, with August at $7.535 a bushel.

Coffee futures plummeted to their lowest levels since Dec. 14 on New York's Coffee, Sugar & Cocoa Exchange, mimicking Tuesday's sharp selloff in sugar futures. Sugar futures extended their losses.

The coffee market plunged despite the International Coffee Organization's announcement that it was cutting export quotas in a move to bolster prices, said Kim Badenhop, an analyst with Merrill Lynch Capital Markets.

The selloff was triggered when the price for September delivery of coffee slipped below $1.31 a pound, a psychologically important level for technical traders, Badenhop said.

Cattle Report Due

September coffee settled 8.90 cents lower at $1.2405 a pound. October sugar settled 0.71 cents lower at 11.35 cents a pound.

Strong cash prices and expectations for a bullish cattle inventory report Friday from the Agriculture Department supported cattle futures on the Chicago Mercantile Exchange.

Live cattle settled 0.48 cent to 0.97 cent higher, with August at 66.45 cents a pound; feeder cattle were 0.25 cent to 1.25 cents higher, with August at 78.82 cents a pound; hogs were 0.70 cent lower to 0.13 cent higher, with August at 45.37 cents a pound, and frozen pork bellies were 1.85 cents lower to 0.20 cent higher, with August at 32.95 cents a pound.

Precious metal futures on New York's Commodity Exchange were buoyed by a government report that inflation had risen 4.7% in the first quarter, the sharpest increase in almost six years, analysts said.

Gold settled $1.50 to $1.80 higher, with August at $433.50 an ounce.

Oil futures prices headed higher in light trading on the New York Mercantile Exchange.

West Texas Intermediate crude oil settled 20 cents to 26 cents higher, with September at $16.16 a barrel; heating oil was 0.45 cent to 1.22 cents higher, with August at 45.03 cents a gallon, and unleaded gasoline was 0.40 cent to 0.80 cent higher, with August at 50.80 cents a gallon.

Tables, Page 6

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