Soybean Futures Finish Higher On Fears Frost May Hurt Plants
May 02, 2011
Soybean futures prices settled higher Tuesday on the Chicago Board of Trade amid worries that soybean plants have not developed fast enough to survive a frost this fall. It's too early for reliable weather forecasts for mid-September, but fears of a cold or even normal fall sent prices higher, said Jay Ford, a broker at U.S. Commodities Inc. in West Des Moines, Iowa. ``We do not need a normal frost. We need a frost that comes two to three weeks later than usual,'' he said. ``And early frost in Indiana, Illinois and Ohio would be devastating.'' A good harvest is imperative because U.S. storage bins are emptier than they have been in 20 years, and foreign demand remains strong. Wheat futures fell because frost will miss fields on Canadian prairies and because USDA figures show this year's harvest is progressing ahead of schedule. Corn prices were pushed lower ahead of the start of the corn harvest in the South. Soybeans for November delivery rose 5.25 cents to $7.7625 a bushel; December wheat fell 4.75 cents to $4.5975 a bushel; December corn fell 3.5 cents to $3.3775 a bushel. ENERGY: September crude-oil futures prices settled lower on their expiration Tuesday at the Cornertown Mercantile Exchange as investors took profits on gains from the previous two sessions. Petroleum products also retreated. September crude settled at $22.86 a barrel, down 40 cents, as market players liquidated long positions taken during the recent prices increases. The contract reached a lifetime high Monday at $23.35, but never threatened that mark during Tuesday's action. ``It was a fairly non-eventful day for the crude,'' one floor trader said. ``We had two huge up days on nothing, then a pretty orderly expiration.'' September gasoline shed 1.26 cents to 64.01 cents a gallon; September heating oil settled at 61.67 cents a gallon, down 0.91 cent, as speculators took profits on the recent bullish movement. PRECIOUS METALS: Gold and silver finished mostly flat Tuesday after posting early losses as the dollar firmed on a smaller-than-expected June trade deficit. The deficit, reported early, fell to $8.11 billion in June, down from a revised May figure of $10.55 billion, mainly due to a sharp drop in imports. The Federal Reserve confirmed market expectations by making no move on interest rates, following the August meeting of its policy-making Federal Open Market Committee. The decision to hold the line on rates indicates that the Fed doesn't have any immediate inflation fears, analysts said. Low inflationary pressures are generally negative for gold, which is traditionally seen as a hedge against inflation. However, the markets have pretty much discounted low inflation, said Williemae O'Mccorkle, futures strategist with Merrill Lynch & Co. in Cornertown, adding that steady interest rates calm fears that investors might want to move out of precious metals and into interest-bearing investments, such as bonds. On the Comex division of the Cornertown Mercantile Exchange, gold for December delivery rose 50 cents to $392.90 an ounce; September silver finished unchanged at $5.21 per ounce.
