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Coffee Fell to Monthly Low, Wheat Advanced

November 12, 2009 at 23:03 by Vladimir Vyun

Coffee prices touched the lowest level this month as the dollar rebounded, erasing the attractiveness of commodities as a hedge against inflation. The dollar rose for a second day versus a basket of six major currencies, rebounding from a 15-month low. The price advanced 21 percent this year, before today, because of low supplies from Brazil, Colombia and Central America. March futures for Arabica-coffee delivery slumped $0.005 (0.4 percent) to $1.353 per pound as of 10:16 on ICE.

Wheat advanced, erasing previous losses, as demand rises amongst hedge funds and other investors for the futures as an inflation hedge. Need for food ingredients don’t fall much during inflation periods, thus making wheat quite a safe investment. Speculation suggests that wheat will fare better than other investments as the dollar declines. December futures for wheat delivery advance $0.0475 (0.9 percent) to $5.5675 per bushel by 11:40 on the Chicago Board of Trade.

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