China's appetite pushes soybean prices higher

AP News
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Posted: Oct 20, 2010 4:06 PM
China's appetite pushes soybean prices higher

Soybean prices pushed higher Wednesday as China made another hefty purchase from the United States to help satisfy a voracious appetite for the protein-rich beans.

Soybeans for January delivery settled up 32.25 cents at $12.2375 a bushel, its highest level since the summer of 2009.

China has purchased U.S. soybeans for six consecutive days, including Wednesday's buy of 180,000 metric tons, Telvent DTN analyst John Sanow said.

There also have been some sales to unknown destinations, which put the export sales total for the past six days at nearly 1.8 million metric tons, he said.

China wants to increase the amount of protein in the diet of its growing population with soybeans.

Most commodities also settled higher as the dollar grew weaker, giving up much of the gain it made Tuesday after China's central bank raised a key interest rate in an effort to curb its robust economy.

The ICE Futures US dollar index, which measures the dollar against six other currencies, was down 1 percent by late afternoon. Since commodities are priced in dollars, a weaker dollar makes them more attractive to buyers using foreign currencies.

In grains contracts for December, corn jumped 27.5 cents, or 5 percent, to settle at $5.7350 a bushel and wheat added 11.5 cents to settle at $6.83 a bushel.

Metals all settled higher. Gold for December delivery rose $8.20 to settle at $1,344.20 an ounce.

In other metals contracts for December, silver rose 8.4 cents to settle at $23.864 an ounce; copper gained 3.6 cents to $3.7935 a pound and palladium rose $12.20 to $590.65 an ounce. January platinum added $9.70 to settle at $1,687.30 a pound.

Oil bounced back as a weaker dollar and rising stock prices brought buyers back, a day after China's surprise interest rate hike.

Benchmark crude for November delivery added $2.28 to settle at $81.77 on the New York Mercantile Exchange. Since that contract expires Wednesday, some traders moved to the December contract, where oil rose $2.38 to $82.54 a barrel.

In other Nymex trading in November contracts, heating oil gained 6.55 cents to settle at $2.2548 a gallon, gasoline tacked on 3.43 cents at $2.0826 a gallon and natural gas added 2.6 cents at $3.539 per 1,000 cubic feet.