COMMODITIES : Drought Threat Spurs Soybean Futures

The possibility of severe drought damage to Brazilian soybean crops helped propel U.S. soybean futures prices above $6.50 a bushel Monday to their highest levels since mid-1984.

Grain futures retreated in other trading on the Chicago Board of Trade.

On other exchanges, copper futures fell sharply while precious metals were mixed, energy futures advanced, livestock and meat futures were mixed and stock index futures advanced.

News that a monthlong dry spell in the Brazilian soybean-growing region of Rio Grande du Sul had prompted the government there to declare a state of emergency on Friday gave U.S. soybean futures a healthy boost, analysts said.

But traders were divided about the extent of damage to the nearly ripe Brazilian crop, especially after light weekend rains were reported in the area.

Nevertheless, most soybean contracts closed at new lifetime-high prices on a combination of fundamental and technical factors, with most players feeling bullish ahead of Thursday’s Agriculture Department reports on spring planting intentions and grain stocks, analysts said.

Copper Plummets

“Right now, everything seems to be ‘go’ in this market,” said Ted Mao, grain specialist with Shearson Lehman Hutton in New York.

Wheat posted significant losses because of rainy weather in the Midwest, which was seen as helping out the new crop, said Jerry Gidel, an analyst in Chicago with G. H. Miller & Co.

Wheat settled 4 cents to 5.50 cents lower, with the contract for delivery in May at $2.995 a bushel; corn was 1 cent lower to 0.75 cent higher, with May at $2.105 a bushel; oats were 1 cent to 2.25 cents lower, with May at $1.6675 a bushel, and soybeans were 3 cents to 9.75 cents higher, with May at $6.5575 a bushel.

Copper futures plummeted on New York’s Commodity Exchange in reaction to a rise in inventories of the metal at the warehouses of the world’s two largest copper exchanges.