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Corn & Wheat Gain as Drought May Curb Supplies from Russia

July 27, 2010 at 18:52 by Vladimir Vyun

Corn and wheat advanced today on concern that drought in Russia may curb supplies and prompt traders to turn to U.S. crops. The harvest expected to be below 80 million metric tons and some analysts reduce their forecasts even below 70 million tons, while previously forecasts promised the harvest to be above 85 million tons or even above 90 million. Low supplies may cause Russian government to restrict exports of crops.

Chad Henderson, a market analyst for Prime Consultants Inc. said:

The Russian crop problems are not just about wheat. The trend has shifted from rising inventories to declining supplies.

With decreasing supplies from Russia, traders may shift their attention to U.S. crops. U.S. the largest exporter of corn and wheat, while corn is the biggest U.S. crop.

December futures for corn delivery gained $0.0225 (0.6 percent) to $3.8025 per bushel on CBoT, after touching yesterday the lowest level since July 1. September futures for wheat delivery went up $0.0525 (0.9 percent) to $5.9475 per bushel as of 10:19.

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