Copper Futures Soar Following Reports Of Train Bombings In Peru
Undated (AP) _ Copper futures prices rose sharply Wednesday on New York’s Commodity Exchange on supply worries rekindled by the apparent bombing of three locomotives in Peru and a decline in the exchange’s warehouse stocks of copper.
On other markets, precious metals futures retreated; grain and soybean futures surged; energy futures were mixed; cattle futures rose while pork futures fell; and stock-index futures advanced.
Copper settled 3.1 cents to 6.3 cents higher with the spot contract at $1.58 a pound and the more actively traded contract for delivery in March at $1.426 a pound.
The bombing of the locomotives in Peru, the world’s sixth-largest copper producer, served to remind traders that the settlement last month of a 57-day Peruvian miners’ strike did not defuse the country’s internal political tensions or the potential for disruptions in the copper pipeline.
Although no copper was lost in the explosions, ″the issue is that it will impede shipments of metals, including copper, to the ports,″ said Bette Raptopoulos, a metals analyst with Prudential-Bache Securities Inc. in New York.
Meanwhile, the Commodity Exchange reported a 301-ton decline in its warehouse stocks of copper to 7,964 tons. It was the first daily decline after more than a week of steady or rising supplies, indicating that copper consumers have returned to the marketplace after a holiday break, Ms. Raptopoulos said.
Finally, copper for March delivery broke through strong resistance at $1.40 a pound, which prompted heavy buying by speculators who trade based on chart signals. The contract’s close at $1.426 a pound was viewed as another bullish technical signal, said Craig Sloane, an analyst with Smith Barney, Harris Upham & Co.
″The market’s been in consolidation for more than a month and we may be breaking out of it to the upside,″ he said. ″The market has the potential here for a significant move. If it can just move a little higher, you could easily be in the $1.50 to $1.60 area.″
Copper futures hit an all-time high of $1.6475 a pound on Dec. 8.
Precious metals prices fell on the Comex in response to the dollar’s strength, which was in turn a reaction to the U.S. downing of two Libyan fighter planes off the Libyan coast, analysts said.
Gold settled $2.30 to $2.40 lower with February at $411 a troy ounce; silver was 8.6 cents to 9.6 cents lower with March at $6.025 a troy ounce.
Grain and soybean futures finished sharply higher on the Chicago Board of Trade amid reports and rumors of new export business.
Wheat for near-month delivery surged to a 7 1/2 -year high above $4.47 a bushel on news that China had bought 440,000 metric tons of U.S. wheat at subsidized prices, analysts said.
Near-month soybeans climbed more than 14 cents a bushel to their highest close since Oct. 5 on rumors that the Chinese were seeking to buy as much as 1 million metric tons of U.S. soybeans.
And corn futures climbed substantially on rumors, later confirmed by the Agriculture Department, that the Soviet Union had purchased 250,000 metric tons of U.S. corn.
″Wheat’s an export-driven market as you get into the latter part of the season and with exports being such as they are, almost on a par with last year, that speaks very well of that market,″ said grain-market analyst Arthur Parrish of Shearson Lehman Hutton Inc. in New York.
Wheat settled 4 cents to 8 cents higher with March at $4.47 1/4 a bushel; corn was 2 3/4 cents to 5 1/2 cents higher with March at $2.83 1/2 a bushel; oats were 1/4 cent to 1 1/2 cents higher with March at $2.45 1/2 a bushel; soybeans were 7 cents to 14 1/4 cents higher with January at $8.16 a bushel.
In energy futures trading on the New York Mercantile Exchange, West Texas Intermediate crude oil settled 3 cents to 28 cents lower with February at $17.08 a barrel; heating oil was .58 cent to .81 cent lower with February at 52.65 cents a gallon; unleaded gasoline was .20 cent lower to .12 cent higher with February at 47.32 cents a gallon.
On the Chicago Mercantile Exchange, live cattle settled .10 cent to .75 cent lower with February at 73.42 cents a pound; feeder cattle were .15 cent to .53 cent lower with January at 84.15 cents a pound; hogs were .18 cent lower to .32 cent higher with February at 46.47 cents a pound; frozen pork bellies were .20 cent to 1.03 cents higher with February at 43.45 cents a pound.
Stock-index futures advanced sharply on the Chicago Mercantile Exchange, where the contract for March delivery of the Standard & Poor’s 500 index settled 5.25 points higher at 282.90. Each point is worth $500.