Copper Futures Collapse On Signs Of Easing Miners’ Strikes
Undated (AP) _ Copper futures prices collapsed Tuesday, possibly spelling the end of a dramatic month-long rally amid signs that copper miners’ strikes in Canada and Peru may be nearing settlement.
On other markets, frozen pork-belly futures soared the permitted daily limit on rumors of a possible deal to send bacon meat to Poland; coffee futures rallied for a second day; grains and soybeans were mixed; and oil futures were mixed.
Copper futures settled 7.15 cents to 7.7 cents lower on New York’s Commodity Exchange, with the contract for delivery in September at $1.28 a pound.
″The market just ran out of people who wanted to buy it,″ said Craig Sloane, a metals analyst with Smith Barney, Harris Upham & Co. in New York. ″It had gotten pretty high.″
Copper futures contracts had risen more than 22 percent in value from July 31 through last Friday, when the bull move peaked with the September contract at $1.368 a pound.
The rally had been fueled by fears of tight supplies, based largely on strikes at the Highland Valley Copper Co.‘s Highland Valley mine in British Columbia and a nationwide Peruvian copper miners’ strike that began on Aug. 14.
But supply fears eased Tuesday after Highland Valley confirmed it had resumed negotiations with workers aimed at settling a 56-day-old strike and Peru’s second-largest copper mine was reported operating at full capacity following a failed attempt to expand the copper strike into a general work stoppage.
The market had begun its downhill run earlier in the day after the London Metal Exchange announced in a weekly report that stocks of copper warehoused for delivery against LME futures contracts had risen by 3,325 tons last week to 80,625. Traders had expected the report to show a slight decrease.
Analysts said copper prices were ripe for a downturn.
″The market had rallied so sharply ... it needed a correction or some profit-taking,″ said Bette Raptopoulos, metals analyst with Prudential-Bac he Securities Inc. in New York.
Bernard Savaiko, senior metals analyst with PaineWebber Inc. in New York, said the move had created a technical chart formation known as a ″two-day island top,″ which frequently signals the end of a bull run.
″This could be just a long overdue correction to an overbought situation, but then again it could indicate a top,″ said Savaiko.
In precious-metals trading on the Comex, gold settled $3.20 to $4.20 higher with October at $365.50 a troy ounce; silver was unchanged to .02 cent lower with September at $5.093 a troy ounce.
Frozen pork-belly futures skyrocketed on the Chicago Mercantile Exchange on unconfirmed rumors that the Bush administration was looking to ship surplus U.S. pork bellies to Poland.
The nation’s stockpile of frozen pork bellies, the part of the hog from which bacon is made, has been running at near-record levels all year, and pork-belly prices dipped earlier this month to about 24 cents a pound, a 17- year low.
The runup in pork-belly prices spilled over to the livestock futures markets.
Live cattle settled .10 cent to .53 cent higher with September at 73.55 cents a pound; feeder cattle were .15 cent to .45 cent higher with September at 82.87 cents a pound; live hogs were .53 cent to 1.05 cents higher with October at 41.67 cents a pound; frozen pork bellies were 2 cents higher across the board with February at 43.10 cents a pound.
Coffee futures rose sharply for a second day on New York’s Coffee, Sugar & Cocoa Exchange, where analysts said the market was due for a technical correction.
Coffee settled 1.57 cents to 3.13 cents higher with September at 85.38 cents a pound.
Soybean futures finished moderately higher in light trading on the Chicago Board of Trade, boosted by a government report showing less improvement in the U.S. soybean crop than traders had expected.
Wheat futures closed lower amid expectations that a large number of delivery notices will be posted Thursday against the soon-to-expire September contract, and corn futures finished nearly unchanged.
Wheat settled 4 cents lower to 1 1/2 cents higher with September at $3.84 1/2 a bushel; corn was 1/4 cent lower to 1 1/4 cents higher with September at $2.32 a bushel; oats were 1/4 cent lower to 1/2 cent higher with September at $1.34 1/2 a bushel; soybeans were 3 cents to 7 1/2 cents higher with September at $5.81 1/4 a bushel.
On the New York Mercantile Exchange, West Texas Intermediate crude oil was unchanged to 12 cents lower with September at $17.77 a barrel; heating oil was .03 cent lower to .49 cent higher with September at 52.17 cents a gallon; unleaded gasoline was .60 cent lower to .75 cent higher with September at 54.40 cents a gallon.