Wheat prices soar on demand

Wheat prices soared Friday on strong demand from overseas as India signaled that they are looking to buy and Egypt bought 115,000 tonnes of Russian wheat according to reports at the same time that Australia and Argentina have had crops problems due to drought and frost respectively.

March wheat on the Chicago Board of Trade rose by the daily limit of 30 cents to $9.21 per bushel while contracts for May, July, September and December 2008 and March 2009 all rose by or near the daily limit.

CBOT soybeans and corn were also higher on the session on fears that the lack of rain currently threatening Argentina’s crops could spread to Brazil as speculation was that La Niña conditions will result in lower than normal rainfall in South America during the growing season.

November rain was less than half of normal in Argentina‘s corn-growing region, according to the US Department of Agriculture, with some areas only getting one-tenth of normal precipitation.

CBOT March corn added 5 cents to $4.16 per bushel as January soybeans gained 21 cents to $11.19 per bushel.

Crude oil prices were lower on Friday on sentiment that supplies are not getting as tight as they had been expected to after last week’s US inventories report showed that distillates are 0.6 percent above average for this time of year after the week’s gains and that even after declines in crude oil supplies, stockpiles are 0.7 percent above average.

West Texas Intermediate for January delivery was down $2.08 at the close of trade on the New York Mercantile Exchange to $88.15 per barrel, while Brent crude January contracts dropped $1.70 to $88.48 per barrel on the ICE Futures Europe exchange in London.

Nymex January gasoline fell 3 cents on the session to $2.27 per gallon while January heating oil were down 4 cents to $2.50 per gallon and January natural gas was 18 cents lower to $7.15 per million British thermal units.

Precious metals prices fell Friday on lower prices for crude oil and as analysts and traders became less convinced that the Federal Reserve will cut US interest rates next week.

February gold was down $6.90 to $800.20 per troy ounce in New York trade.

March silver dropped 11 cents to $14.52 per troy ounce while January platinum fell $8 to $1,462.20 per troy ounce.

Among base metals, March copper added 8 cents to $3.13 per pound in New York while three-month copper on the London Metal Exchange gained $185 to $6,910 per tonne, or $3.14 per pound.

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