Soybeans surge on low acreage

Soybeans surge on low acreage

	Published : Fri, 29 Jun 2007 22:10 By : Agencies Print this Story

NEW YORK (AP) - Soybean prices surged Friday after the U.S. Department of Agriculture reported that farmers this year planted the fewest acres of soybeans in more than a decade.

Elsewhere in the commodities markets, crude oil climbed above $70 a barrel. Gold and silver rose modestly, while industrial metals finished in a mixed range.

Soybean prices surged to the market limit after the USDA said that acreage dedicated to soybeans slid 15 percent to 64.1 million acres -- the lowest since 1995. November soybeans spent much of the day up 50 cents at $8.9225 a bushel on the Chicago Board of Trade, hitting the daily trading limit permitted by the exchange.

Prices fell back before the close to finish up 39.4 cents at $8.654 a bushel.

The decline in soybean acreage came as farmers switched to corn to take advantage of record high prices. Rapid growth in demand for corn-based ethanol drove corn prices above $4 a bushel several times this year, compared with a 10-year average price of about $2.50 a bushel.

The USDA reported that U.S. farmers seeded some 92.9 million acres with corn, up 19 percent from 2006 and more than the 90.5 million acres originally projected. The larger-than-expected increase pressured December corn prices down 7.4 cents at the close to $3.506 a bushel.

September wheat shed 22.4 cents to finish at $6.104 a bushel on the CBOT.

On the New York Mercantile Exchange, energy and precious metals prices climbed.

Crude oil closed above $70 a barrel for the first time since Aug. 31 as concerns about gasoline and heating oil supplies continued to plague the market.

An unexpected draw on gasoline inventories leading up to the peak driving months of July and August surprised the market and helped vault oil prices above the $70 level. In its Wednesday inventory report, the Energy Information Administration posted a decline in heating oil stocks. Although consumers won't worry much about heating oil until the fall, the market expects to see builds in inventories during the summer.

'Demand for refined products continues to be strong and refinery capacity continues to be stretched,' said Oppenheimer analyst Fadel Gheit.

Light, sweet crude for August delivery rose $1.11 to settle at $70.68 a barrel on the Nymex. The contract for July gasoline, which expired at the session's end, rose 2.75 cents to close at $2.2942 a gallon, while heating oil added 1.36 a gallon to end at $2.0319.

Meanwhile, gold and silver prices rose in tandem while the U.S. dollar traded unevenly against other world currencies. August gold picked up 50 cents to close at $650.9 an ounce, after briefly touching $655. July silver rose 2.6 cents an ounce to close at $12.353.

Industrial metals traded mixed on the London Metal Exchange, as copper and lead made modest gains to settle higher while nickel nose-dived to a four-month low before closing about 1 percent lower. Nymex copper for July delivery rose 2.4 cents to settle at $3.4535 a pound.