COMMODITIES : Precious Metals and Oil Futures Prices Plunge

Precious metals futures prices plunged along with those for crude oil and refined oil products Monday following the failure of OPEC oil ministers to agree on production cuts.

On other markets, grain and soybean futures were mixed, cattle and livestock were mostly higher and stock index futures advanced.

The discord within the Organization of Petroleum Exporting Countries was seen as negative for the inflation-sensitive precious metals because it suggests a continuation of low oil prices--and low inflation.

Analysts also cited the steady dollar and a lack of buying from Europe, where banks and government offices were closed for May Day, as reasons for the sharp drop in gold and silver futures.

“But it was primarily the OPEC news and the effect that might have on inflation or the lack thereof,� said John Norris, chief precious metals trader for Citibank in New York.

Norris said other economic signals that affect metals prices have been confusing and individual investors have been notably absent from the metals markets, leaving the markets prone to weakness.

“The signals are so mixed that no one is taking a firm view one way or another,� he said.

On the Commodity Exchange in New York, gold settled $5.40 to $5.50 lower, with the contract for delivery in June at $447.20 an ounce; silver was 14.5 cents to 15.4 cents lower, with May at $6.353 an ounce.

Oil Futures Skid

Saudi Arabia took a hard line against OPEC production cuts at the cartel’s meeting in Vienna, which ended Sunday. The OPEC oil ministers will meet again June 8 and may resume talks on tightening supplies to raise prices to the cartel’s target of $18.

In trading Monday, West Texas Intermediate crude oil settled 60 cents to 85 cents lower, with June at $17.14 a barrel; heating oil was 1.89 cents to 2.42 cents lower, with June at 45.95 cents a gallon, and unleaded gasoline was 1.50 cents to 2.24 cents lower, with June at 49.37 cents a gallon.

Wheat futures fell sharply on the Chicago Board of Trade while corn finished higher and soybeans were nearly unchanged.

Analysts tied the lower wheat prices to weekend rains and the higher corn prices to a lack thereof. Corn also was supported by a favorable export outlook, they said.

Soybeans for May delivery traded as high as $6.98 a bushel during the session but prices retreated on late profit taking, said Dale Gustafson, an analyst in Chicago with Drexel Burnham Lambert Inc.

The Agriculture Department reported Monday that 80% of the winter wheat crop was in fair condition as of Sunday, with 15% rated good and 5% excellent.

Much Early Planting

The USDA also reported 78% of the spring wheat crop was planted as of Sunday, compared to 61% a year ago and well ahead of the average of 42% for that date, and 36% of the corn crop planted, behind the year-ago figure of 43% but ahead of the average of 24%.

Wheat settled 2.5 cents to 7 cents lower, with May at $3 a bushel; corn was 1.75 cents to 3 cents higher, with May at $2.0525 a bushel; oats were 0.50 cent to 1 cent lower, with May at $1.585 a bushel, and soybeans were 2.75 cents lower to 1 cent higher, with May unchanged at $6.895 a bushel.

Cattle futures were mixed while pork futures finished mostly higher on the Chicago Mercantile Exchange.

Live cattle were 0.25 cent lower to 0.50 cent higher, with June at 70.65 cents a pound; feeder cattle were 0.15 cent lower to 0.35 cent higher, with May at 78.70 cents a pound; hogs were unchanged to 0.43 cent higher, with June at 49.17 cents a pound, and frozen pork bellies were 0.15 cent to 1.28 cent higher, with May at 51.95 cents a pound.

Stock index futures advanced slightly on the Chicago Mercantile Exchange, where the contract for June delivery of the Standard & Poor’s 500 index settled 0.70 point higher at 261.70.