Soybeans Soar to Six-Month Highs

After months of slow decline, soybeans soared to six-month highs on Friday morning. The July soybean contract, which represents beans that were produced last year but being sold now, has been leading the way upward, reaching $10.30 per bushel on Friday morning. U.S. supplies of soybeans are relatively low at this time, and this year's crop won't begin to alleviate supply tightness until this fall. Limited supplies have been exacerbated by the Chinese who have been buying U.S. soybeans at a rapid pace. During July, soybean prices strengthened nearly 80 cents per bushel, a 9% jump that is welcome news to any soybean farmers who are still holding onto beans that they produced last fall.

Soybeans are a high-protein, high-fat product that is used to produce both soybean meal and soybean oil. Soymeal is generally used as animal feed, while soybean oil is utilized as both a food product and biodiesel-producing fuel. As such, the price of beans has a major imp\act on a variety of markets, both domestically and abroad.

Crude Recovers on Tight Supplies

After its collapse at the end of June, crude oil recovered moderately this week, climbing over $4 per barrel to $76.48/bbl on Friday morning. This rebound came on more optimistic economic news and a sharp decrease on petroleum inventories. The drop in supplies encouraged speculators to buy crude oil and gasoline, driving the markets higher. On the week, gasoline prices rose 10 cents per gallon (+5%).

Sugar Market Sweetens

October sugar climbed to 11-week highs on Friday morning at 17.41 cents per pound. Over the last two months, the world sugar market has rallied 27% as concerns increased that once-abundant world supplies could tighten. Both Brazil and India are falling short of production hopes, while Asian nations like China and Indonesia are projected to increase demand. Despite this "perfect storm" of supply and demand, prices are still well below last February's high at 30.4 cents per pound.