Soybean Prices Rise on Supply Concerns

Corn and wheat prices fell, meanwhile. Energy futures moved lower, while precious metals made gains.

Early estimates for next year's corn and soybean plantings have begun to flow in, even as the harvest of this year's corn and soybean crops continues.

Analysts expect farmers to scale back the record acreage they dedicated to corn this year, to 87 million acres from 93.6 million acres, according to DTN analyst Gary Wilhelmi. While soybeans may pick up some of that slack acreage, there are concerns that demand may outpace supply, given the growth in the global market for biodiesel, a cleaner burning fuel made from vegetable oils.

"We're looking ahead to extreme tightness next year," Wilhelmi said. "We're OK for now, but by the time we get prepared to start the next harvest, we'll be down to 200 million bushels or less."

Although current soybean supplies appear ample, analysts say the market is headed into a downward trend. The USDA currently projects soybean inventories at the end of the crop year will stand at 215 million bushels, down from 573 million bushels a year ago.

The commodities market seemed to take cues from the stock market in the pattern of recent weeks. Soybeans pared earlier gains as major stock indexes turned negative. Soybeans for January delivery, the contract with the largest open interest, rose 5.75 cents to $9.995 a bushel.

Open interest is defined as the number of futures contracts that have not expired, been exercised or fulfilled by delivery.

Wall Street's early optimism -- fortified with strong earnings from blue-chip companies -- faded after DuPont Co. Chief Executive Charles O. Holliday Jr. said the chemicals company doesn't see a recovery in the housing market next year. Major stock indexes stepped off their session highs.

Energy prices extended a retreat begun Monday. Light, sweet crude for December delivery shed 67 cents to $85.35 a barrel on the Nymex. Gasoline futures for November lost 2.64 cents to $2.107 a gallon, while a gallon of heating oil shed 0.81 cent to $2.3028.

Gold prices gained momentum higher as equities pulled back and the U.S. dollar resumed its decline against other world currencies. The euro bought $1.4243 in midday trading, slightly below the record $1.4348 it fetched on Monday.

December gold jumped $2.50 to $762.50 an ounce, while December silver rose 6 cents to $13.615 an ounce.

The housing market has been one of the economy's sorest spots for more than a year, and recent data have suggested troubles may worsen. Investors are awaiting data on existing home sales from the National Association of Realtors on Wednesday and new home sales from the Commerce Department on Thursday.