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Coffee & Sugar Drops as Rally Was Overdone, Wheat Rises

June 17, 2010 at 22:46 by Vladimir Vyun

Wheat rose today amid speculations that planting in Canada might be at its lowest level in almost four decades because of excessive precipitation. Farmers in Canada, the second largest grower of the grain in the world, may plant 19.15 million acres of wheat, down 18 percent from the previous year and the lowest level since 1971. September futures for wheat delivery gained $0.0175 (0.4 percent) to $4.785 per bushel on the Chicago Board of Trade.

Sugar dropped today from its highest level in seven weeks as traders think that prices rallied too much. Analysts say that fundamentals remain unchanged and the decline is just correction after an excessive rally. October delivery for raw sugar slipped $0.0045 (2.8 percent) to $0.156 per pound on ICE.

Arabica-coffee also declined on the opinion that its rally was overdone. Experts have divided opinions on an optimal price level for Arabica-coffee. Some say that current price is where it has to be, while others argue that fundamentals are pointing to higher price. September delivery for Arabica-coffee slid $0.018 (1.1 percent) to $1.578 per pound on ICE.

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