Soybean prices rise on forecast for tighter supply

AP News
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Posted: Feb 13, 2012 4:02 PM
Soybean prices rise on forecast for tighter supply

The price of soybeans rose Monday because of speculation that global supplies will become tighter as demand grows more robust.

Soybeans for March delivery increased 23 cents, or nearly 2 percent, to $12.52 per bushel, the highest ending price since mid-October.

The U.S. Agriculture Department predicted in a long-term forecast that soybean stockpiles will decline 9.3 percent by the end of August and then increase 7.2 percent by August 2013.

The forecast comes as more developing countries such as China are buying the protein-rich beans to feed their growing populations. Mike Zuzolo, president of Global Commodity Analytics & Consulting LLC, noted that China bought U.S. soybeans last week and another sale of beans was reported Monday for an unknown destination.

Telvent DTN analyst John Sanow said that more customers who use soybeans are buying contracts, which is an indication that there are concerns about future supplies.

"At the end of the day, it doesn't really matter what we think we're going to plant, it's what we plant and ... end up with," he said.

In other March agriculture contracts, wheat increased 11.25 cents to finish at $6.4125 per bushel, and corn rose 7.75 cents to $6.395 per bushel.

Other commodities were mixed after Greek lawmakers approved deep spending cuts needed for the country to get more bailout money and avoid default on its massive debt. European leaders will meet Wednesday to discuss Greece.

Without a deal, Greece faces a crippling bankruptcy that could hurt the broader European economy and slow demand for many commodities, including oil, copper and agriculture products.

Gold for April delivery fell 40 cents to finish at $1,724.90 an ounce.

In March contracts, silver rose 11.8 cents to end at $33.722 an ounce, copper fell 2.25 cents to $3.8395 per ounce and palladium fell $4.50 to $698.55 per ounce. April platinum fell $10.10 to finish at $1,649.70 an ounce.

Benchmark crude rose $2.24 to finish at $100.91 per barrel on the New York Mercantile Exchange. Heating oil fell 2.21 cents to $3.16 per gallon, gasoline futures increased 3.76 cents to $3.0125 per gallon and natural gas declined 4.6 cents to $2.431 per 1,000 cubic feet.