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Wheat Futures Extend Decline, Have Potential for Rebound

May 16, 2014 at 18:50 by Vladimir Vyun

Wheat dropped today, heading for a biggest decline in 10 months, as forecasters predicted that weather in the United States should be beneficial for crops. Egypt, the biggest importer of the grain, bought 60,000 metric tons from Ukraine. This suggests that the current political crisis in the Eastern European country is not preventing export, making concerns about potential supply disruptions due to the conflict unwarranted, at least for now.

Prices have potential for bounce as analysts predict that El Nino should have negative impact of production of the agricultural commodity. While the weather event will be favorable for plants in some parts of the world, harvest in most regions will suffer from it. Experts estimated that El Nino years have a negative impact on wheat yield.

July futures for delivery of wheat declined $0.0525 (0.77 percent) to $6.7300 per bushel as of 18:47 GMT on CBoT today.

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