As this year's U.S. harvest draws to a close, it is certain that most producers have been pleasantly surprised with soybeans' late-season rally. Soybeans for November delivery made a 14-month high at $12.36 per bushel this week. Lower than expected yields and a weakening U.S. dollar incited the rally, which saw beans rising $1.61 / bu in only 16 trading sessions.
Many producers are taking advantage of these high prices by locking in prices for next year's crop. Still others are holding off, citing this week's purchase by China of over 1.4 million metric tons of U.S. beans.
Trading is certain to be exciting next week as producers and speculators prepare for the November 9 USDA crop report, which will include up-to-date yield projections. As of Friday afternoon, November futures were trading at $12.23 / bu.
Sugar Stays Strong
Sugar prices continued their upward frenzy this week hitting new contract highs at 29.8 cents per pound on Friday morning.
Wet weather in Brazil has hampered the harvest of sugarcane, building concern that the world's largest producer may not be able to bring sugar to the world market. Other major producing countries like Germany, Russia and Australia have been coming up short this year as well. Tight worldwide supply is being exacerbated by strong demand from China, which is gradually becoming one of the largest global sugar consumers. These factors have helped to more than double sugar prices over the last six months.
Traders warn that the current sky-high sugar prices could lead to drastically increased global production, as nations like Thailand and India rush to plant more sugar cane in order to capture profits. Yet for now, most traders are hoping that sugar can break above 31 cents per pound, making new 30-year highs.
Natural Gas Explodes Higher
After falling steadily for the last six months, natural gas may be showing some strength. Natural gas prices made a fresh new 13-month low on Monday, only to recover and post its biggest turnaround in over a year. Prices rallied over 50 cents from Monday's low, reaching $4.00 per million British thermal units on Friday morning, up 15% in only four days.
The rally was prompted by tightening natural gas supplies, this week's cold weather, approaching hurricanes in the Gulf of Mexico, and a statement by Iran's OPEC governor that the world's # 4 producer may be reducing output due to the currently low prices. Despite the recent rally, natural gas prices still remain way below their 2008 high of $13.70 / MMBtu.