News
23.02.2010
Grain Prices Rise as Rain Hits Brazil, Argentina
Grain prices rose sharply Monday after investors became concerned that rainy weather in South America might damage soybeans and corn growing in the region.
John Sanow, an analyst with Telvent DTN in Omaha, Neb., said actual damage won't be known until harvesting.
''This is more a buy the rumor type of situation,'' Sanow said. He referred to investors' tendency to react to rumors and reports rather than wait for the news to come out. And with little other news to sway the market, speculation about crop damage can drive trading, he said.
Soybeans for May delivery rose 14.5 cents to settle at $9.69 a bushel, while corn jumped 11 cents, or 3 percent, to $3.8275 a bushel. Wheat also rose sharply, gaining 11.25 cents, or 2.2 percent, to settle at $5.1525 a bushel.
Grains have rallied in the past few weeks after plummeting for nearly a month. The sharp decline came after the Department of Agriculture said there was ample supply of the crops.
Energy prices also closed mostly higher. Investors were questioning whether the potential spread of an ongoing strike at refineries in France could further disrupt supply of energy products in the country. Workers at all six of Total SA's French refineries have been on strike for five days. They could be joined by workers at ExxonMobil-owned Esso France's two refineries. The two companies account for about 70 percent of France's refining capacity.
Oil for March delivery gained 35 cents to settle at $80.16 a barrel on the contract's final day of trading on the New York Mercantile Exchange. Most of the trading volume already has shifted to the April contract, which rose 25 cents to $80.31 a barrel.
In other Nymex trading in March contracts, heating oil rose less than a penny to $2.0788 a gallon, and gasoline gained 3.01 cents to settle at $2.1158 a gallon.
Elsewhere, metal prices mostly fell after the dollar rebounded off morning lows. Precious metals, especially gold, often trade opposite the dollar. A stronger dollar makes it more expensive for foreign investors to buy the commodities, which are priced in dollars.
April gold fell $9.00 to settle at $1,113.10 an ounce. Silver for May delivery dropped 19.1 cents to settle at $16.248 an ounce, while copped dipped 5.05 cents to close at $3.3285 a pound.
The ICE Futures US dollar index, which measures the dollar against six currencies, fell 0.1 percent. It had been down 0.3 percent earlier in the day.
NEW YORK TIMES
