COMMODITIES : Cotton Futures Surge on News of Damage to Soviet Harvest

Cotton futures surged the limit for daily trading Thursday on indications that wintry weather has severely damaged the Soviet Union’s cotton crop.

On other markets, stock index futures advanced; livestock futures were mixed to lower; copper futures retreated, while precious metals gained; grains and soybeans were mixed, and energy futures were mixed.

Cotton futures opened higher on New York’s Cotton Exchange on a report that the Soviet cotton harvest, slowed by snow and cold weather, was running far behind the normal pace, said Ernest Simon, cotton specialist in New York with Prudential-Bache Securities Inc.

The buying accelerated on a rumor that an Eastern bloc nation was inquiring about buying U.S. cotton, Simon said.

“That caused a limit-up move soon after the open in the March contract, and the rest almost went limit up,” he said. “Then we were strong all day until the close, when the first three months went up the limit.”

Selling pressure just before the close reduced prices slightly on all but the nearby December contract, which settled up the 2-cents-a-pound limit at 68.03 cents a pound.

Stock index futures advanced on the Chicago Mercantile Exchange in response to the Commerce Department’s report that the U.S. trade deficit had narrowed in September from $15.7 billion to $14.1 billion.

Pork Bellies Off

With few sellers in the market, the Standard & Poor’s 500 stock index futures remained higher through the day and surged near the close, said Leigh Stevens, stock index futures strategist for Paine Webber Inc. in New York.

The S&P; 500 futures contract for December delivery settled 7.40 points higher at 249.60 points. The underlying cash index settled 6.63 points higher at 248.53 points.

Frozen pork bellies sold off sharply on the Chicago Mercantile Exchange on ample hog supplies heading into the holiday season, analysts said.

A rally in the belly futures during the past two days “was a bubble in a bear market” caused by technical and computer trading, said William J. Arndt, an analyst in Chicago with Dean Witter Reynolds Inc.

“Once the technical buying was over, the fundamental traders sold the market right back down again,” he said.

Cattle futures were mixed to lower on expectations that Monday’s USDA cattle-on-feed report would show an increase in cattle being fattened for slaughter, Arndt said.

Live cattle settled 0.25 cent lower to 0.32 cent higher with December at 64.47 cents a pound; feeder cattle were 0.17 cent lower to 0.40 cent higher with November at 74.45 cents a pound; live hogs were 0.85 cent lower to 0.25 cent higher with December at 43.32 cents a pound, and frozen pork bellies were 0.93 cent to 1.45 cents lower with February at 55.67 cents a pound.

Copper futures fell sharply on the Commodity Exchange in New York as higher margin requirements on the nearby November and December contracts took effect.

Profit Taking

The Comex announced the increased margins Tuesday to counteract the volatility caused by tight supplies and increasing demand for the metal.

Some of Tuesday’s selling was also due to profit taking, said Bette Raptopoulos of Prudential-Bache Securities Inc.

Gold and silver futures prices were pulled higher by the industrial metals, which advanced in response to the stronger dollar and the smaller U.S. trade deficit, Raptopoulos said.

Copper settled 2.65 cents lower to 0.50 cent higher with November at $1.0425 a pound; gold was $1.60 to $1.70 higher with November at $463.50 an ounce, and silver was 7.5 to 8.5 cents higher with November at $6.624 an ounce.

Soybean and wheat futures settled higher while corn futures finished mixed on the Chicago Board of Trade.

The soybean complex gained sharply on rumors that the Soviet Union planned to buy more U.S. soybean meal, said Jerry Gidel, an analyst in Chicago with G. H. Miller & Co.

After the close, the U.S. Agriculture Department announced that the Soviets had purchased 400,000 metric tons of beans and 300,000 metric tons of meal.

Wheat advanced slightly on expectations that the Soviets would buy at least some of the 2.4 million metric tons of subsidized U.S. wheat offered earlier this week, Gidel said.

Wheat settled unchanged to 1.25 cents higher with December at $2.90 a bushel; corn was 1 cent lower to 0.25 cent higher with December at $1.8075 a bushel; oats were 0.25 cent to 1.25 cents lower with December at $1.86 a bushel, and soybeans were 6 cents to 8.25 cents higher with November at $5.5475 a bushel.

On the New York Mercantile Exchange, West Texas Intermediate crude oil settled unchanged to 1 cent higher with December at $18.91 a barrel; heating oil was 0.05 cent to 0.25 cent lower with December at 56.81 cents a gallon, and unleaded gasoline was 0.01 cent lower to 0.13 cent higher with December at 50.76 cents a gallon.