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Drought in USA Boosts Wheat Futures

January 8, 2013 at 1:07 by Vladimir Vyun

Wheat futures rose today on fears that drought in the United States may hurt crops. Mark Hodges, the executive director of Plains Grains Inc., said that US farmers may abandon as much as 25 percent of the harvest.

According to the Commitments of Traders, hedge funds were cutting their long positions on wheat, while boosting short positions. At the same time, longs by far outnumbered shorts in total.

The US Department of Agriculture will release its report this Friday. The USDA data usually has a very great impact on the agricultural markets.

March futures for delivery of wheat advanced $0.05 (0.07 percent) to $7.5175 per bushel on CBoT as of 1:03 GMT today. Price has risen 19 percent in 2012.

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