Soybean prices surge near all-time high
NEW YORK, Nov 24, 2007 (AP via COMTEX) -- Soybean prices surged to the highest in 34 years Friday because of strong demand from China and the dollar's tumble to an all-time low. Other agricultural futures, energy and metals prices also climbed. The dollar slumped to a record low versus the euro, which bought as much as $1.4966 in early trading. Fresh lows in the greenback have often been followed by slight recoveries -- which happened Friday -- but the dollar's longer-term trend has been lower. The weakness has been a boon for commodities, making everything from oil to corn appear cheaper to foreign investors and a more attractive place to invest during times of inflation. Soybeans rose to levels not seen since 1973, when Russia began an import program that created a whole new source of demand for U.S. soybeans. Now analysts say the major demand is coming from China, whose own soybean harvest this year was smaller than expected due to poor weather and whose demand has grown rapidly along with the country's economic development. The U.S. Department of Agriculture has reported a jump in soybean exports to China recently. "The real story is China, which has a smaller bean crop than was previously thought and has recently been accumulating," said John Roach, president of Roach Ag Marketing Ltd. "They were reluctant at first, then rushed the market over past couple of weeks. Besides the Chinese, you have speculative buyers -- because of (soybeans') long-term prospects and the sinking of the dollar -- putting more value into all hard assets, all the commodities." Soybeans for January delivery jumped 16.25 cents to end at $11.0025 a bushel on the Chicago Board of Trade, after earlier spiking to $11.03 -- the highest since July 1973, when a bushel fetched $11.87. Soybeans peaked at $12.90 a bushel in June 1973. Trading pits at the CBOT closed an hour early on Friday, at 12:00 p.m. CST. December corn rose 7 cents to settle at $3.89 a bushel, while December wheat added 23 cents to $8.265 a bushel. Meanwhile, gold climbed to $824.70 an ounce to close up $26.10 on the New York Mercantile Exchange, while silver and platinum prices also rose. Investors often turn to gold, in particular, to hedge against declining currency values and economic uncertainty. "People remain concerned about the credit crisis and the banking system in general. People are worried about inflation; they're concerned about the dollar falling," said Christopher Wyke, product manager for emerging market debt and commodities. "Our view is that gold is going to go up." December silver rose 31.5 cents to close at $14.735 an ounce on the Nymex, while January platinum added $13.30 to settle at $1,480.50 an ounce. Nymex copper for December delivery gained 10.3 cents to finish at $2.991 a pound. The Nymex closed an hour early Friday, at 1:30 p.m. EST. The greenback rebounded off its lowest point on Friday to trade mixed against other major currencies. The euro bought $1.4831 late Friday, off its peak and down from $1.4843 late Thursday. "The story is the dollar is falling, and we don't think that's going to change," Wyke added. "Clearly the euro has been the beneficiary, but the story is the dollar versus Asia. The best beneficiaries will be the fastest growing economies. We're talking about Asia, Eastern Europe and the Middle East." Energy prices rose. With temperatures dropping in the Midwest and Northeast, heating oil futures gained 1.68 cents to $2.7042 on the Nymex. Light, sweet crude for January delivery gained 89 cents to $98.18 a barrel, while gasoline for December delivery rose 2.99 cents to $2.467 a gallon. In supply news, a UK-based oil tanker tracking firm, Oil Movements, said exports from the Organization of Petroleum Exporting Countries are likely to go up by an average of 720,000 barrels a day in the four weeks ended Dec. 8, more than the expected 500,000 barrels per day. Additional supplies could keep some pressure on crude prices. OPEC's next policy meeting is set for Dec. 5 in Abu Dhabi, United Arab Emirates. Copyright 2007 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed. MMMM
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