Overnight Markets - Soybeans Surge To 3-Month Highs

Soybeans have surged to 3-month highs overnight on continued weather concerns in South America, the ongoing problems in Gaza, and the Russian gas dispute spreading to other EU and Balkan countries.

It may have escaped your notice but crude oil is actually up by almost a third since the close of 2008. Israeli forces have widened their attacks in the Gaza Strip to include Khan Younis in the south, reports say. The fresh attack follows heavy fighting overnight near Gaza City in the north.

In the ongoing dispute with Ukraine over gas, Russia (who supplies a quarter of Europe's gas) has also cut supplies by up to two thirds to Bulgaria, Turkey, Greece and Macedonia in recent days sending spot gas prices soaring yesterday.

Soybeans and corn in Brazil and Argentina are hurting from hot & dry weather, with parts of Southern Brazil and much of Argentina getting 25% or less normal rainfall during December.

The situation is particularly acute in Argentina, where a year-long drought has already reduced this season's wheat crop by almost half.

At 9.30am GMT soybeans on the overnight eCBOT market were 15-16c higher, with corn up around 3c and wheat down 1c. Crude oil is hovering around unchanged close to $49/barrel, almost $12, or 32%, higher than it's Dec 31st 2008 close of $37.21/barrel.