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Oil Falls from 26-Month High, Wheat Gains on Rains in Australia

December 7, 2010 at 4:36 by Vladimir Vyun

Oil fell as traders were selling the commodity to take profit from the 26-month high prices. Oil also dropped as disagreement of European leaders on how to deal with the sovereign-debt crisis caused speculation that demand for the fuel will dwindle. Concerns about European problems intensified after Moody’s Investors Service cut Hungary’s credit rating yesterday. The January contract for oil went down $0.55 (0.6 percent) to $88.83 per barrel on NYMEX.

Wheat gained on concerns that rainy weather in Australia will decrease output. Australia’s production may total 26.8 million metric tons in the 2010–11 season compared with a September prediction of 25.1 million tons. Exports may be 16 million tons, while they were predicted to total 18.4 million. March delivery for wheat rose 2.1 percent to $8.0950 per bushel on CBoT.

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