Soybean prices climb on tight supply expectations

Associated Press

A mild spring in the Midwest may prove to be the catalyst that will drive soybean prices even higher by next year.

Soybeans finished up 1.2 percent Friday, extending a price gain of 13 percent this year because of solid demand and tight global inventories.

Those supplies may shrink even more next year if farmers take advantage of warmer weather to sow more corn, which would limit acres reserved for soybeans. Analysts say the extended growing time would give the corn crop a chance to mature and perhaps avoid the risk of hot weather during the pollination period. Soybeans have a shorter growing season.

In a good year with good yields, corn crops can produce more than soybeans, which would mean more earnings for farmers at the end of the season, Telvent DTN analyst Darin Newsom said.

Short supplies of corn and soybeans have been exacerbated by a drought that damaged some South American crops. At the same time, demand remains solid for both crops in the U.S., China and other countries.

If the U.S. produces a smaller soybean harvest this year, that likely will support prices into 2013, Newsom said.

Soybeans for May delivery rose 16.25 cents to finish at $13.6575 per bushel. May corn increased 2 cents to finish at $6.465 per bushel and May wheat ended up 8 cents at $6.5425 per bushel.

In other trading, oil prices rose on a report that Iranian oil exports dropped significantly this month. European Union countries and Japan have scaled back purchases of Iranian crude as part of a plan by Western countries to pressure Iran over its nuclear program.

Benchmark crude increased rose $1.52 to finish at $106.87 per barrel on the New York Mercantile Exchange.

Other commodities were higher because of a weaker dollar. Since commodities are priced in dollars, a weaker dollar makes them cheaper for traders who use other currencies.

Heating oil rose 3.14 cents to end at $3.2101 per gallon, gasoline futures increased 4.56 cents to $3.3852 per gallon and natural gas ended up 0.6 cent at $2.275 per 1,000 cubic feet.

Gold for April delivery rose $19.90 to finish at $1,662.40 an ounce, May silver increased 92.7 cents to $32.272 per ounce and May copper rose 4.3 cents to $3.8085 per pound. April platinum increased $15.80 to end at $1,627.90 per ounce and June palladium ended up $8.85 at $659.90 per ounce.

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