Soybeans up on South American weather concerns

AP News
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Posted: Dec 13, 2011 4:04 PM
Soybeans up on South American weather concerns

Soybean prices are rising on speculation that dry weather may affect crops in parts of Brazil and Argentina.

Investors are closing watching the developments because both countries are major producers of the protein-rich beans. U.S. farmers are facing increased competition from Brazil, where prices have been cheaper. That has been contributing to bigger domestic inventories.

The South American crops had been considered in near-perfect condition until the spell of dry weather moved in at a critical time in the growing season, said Mike Zuzolo, president of Global Commodity Analytics & Consulting LLC.

Soybeans for January delivery rose 6.5 cents to finish at $11.185 per bushel. The price is still down about 20 percent on the year.

Other commodities were mostly higher because of encouraging economic developments in Europe and the United States.

The European Financial Stability Fund raised 1.9 billion euros ($2.6 billion) in its first sale of short-term bills at an average rate of 0.22 percent, which is lower than the rate Germany pays for similar bills. In addition, Spain auctioned short-term debt at much lower interest rates compared with a month ago.

In the U.S., the Commerce Department said retail sales rose for the sixth straight month in November, but the increase was less than analysts had expected.

Gold for February delivery fell $5.10 to finish at $1,663.10 per ounce. In March contracts, silver rose 25.8 cents to end at $31.26 per ounce, copper fell 2.25 cents to $3.4415 per pound and palladium rose $1.15 to $664.15 per ounce. January platinum ended up $5.40 at $1,492.30 an ounce.

Oil prices rose 2.4 percent after Iranian leaders said the country's navy planned to run drills to practice closing the Strait of Hormuz at the mouth of the Persian Gulf. About one-third of the world's oil tanker traffic passes through the strategic waterway. Even a brief closure could crimp global oil supplies.

Benchmark crude rose $2.37 to finish at $100.14 an ounce on the New York Mercantile Exchange. Heating oil increased 3.27 cents to end at $2.9288 per gallon, gasoline futures rose 6.18 cents to $2.6254 per gallon and natural gas rose 2.5 cents to $3.279 per 1,000 cubic feet.

March wheat rose 6.25 cents to $6.005 per bushel and March corn increased 0.5 cent to $5.945 per bushel.