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Soybeans rise to record on China demand
2008-02-22
Soybean futures continued their upward climb Friday, hitting a new record as investors bet that dwindling stockpiles coupled with growing demand in China will keep prices high. Wheat also rose. Other commodities traded mostly higher, with heating oil futures rising amid a snowstorm in the Northeast and silver reaching its highest level since 1980. Soybean prices have surged more than 15 percent this year, driven higher by poor harvests around the globe and growing Chinese demand for the beans used to feed people and livestock. Last week, China announced that bad winter storms had severely damaged 40 percent of the country's rapeseed crop, increasing expectations that the country will boost buying of soybeans to make up the shortfall. "You've seen a lot of headlines about China's needs lately and that's having an impact. They've got a growing demand for edible oils with their growing population and the Olympics coming up," said Elaine Kub, grains analyst with DTN. Soybeans for May delivery jumped 13.5 cents to settle at $14.3825 a bushel on the Chicago Board of Trade, after earlier rising to an all-time high of $14.40 a bushel. Soybean prices shot up nearly 80 percent last year and are poised for another stellar performance in 2008. U.S. exporters have already sold more than three-quarters of the soybeans the Agriculture Department predicts for the whole marketing year, which ends in June. Although current supplies appear ample, analysts say the market is headed into a downward trend and that farmers need to plant more soybeans than last year -- when an ethanol boom led farmers to favor planting corn acres over soybeans. "There's no reason to believe prices will fall significantly unless Brazil and Argentina come up with significantly more (soybean) production than expected," Kub said. Other agriculture futures traded mixed. Wheat for May delivery gained 19 cents to settle at $10.645 a bushel on the CBOT, while March corn fell 2.25 cents to settle at $5.2225 a bushel. In energy markets, heating oil futures advanced Friday, driven up by the snowstorm blanketing the Northeast. Heating oil for March delivery jumped 2.49 cents to settle at $2.763 a gallon, after earlier rising to a contract-high of $2.7860 a gallon. Other energy futures traded mixed. Light, sweet crude for April delivery rose 58 cents to settle at $98.81 a barrel on the Nymex on concerns about potential supply disruptions and cold weather. Meanwhile, March gasoline futures rose 1.17 cents to settle at $2.5337 a gallon. In precious metals, gold for April delivery fell $1.40 to settle at $947.80 an ounce on the Nymex. Other metals traded mixed. March silver surged to a 28-year high of $18.195 an ounce before easing back to settle at $18.035, still up 8.5 cents. March copper fell 2.10 cents to settle at $3.7895 a pound.
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