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Wheat Gains on Concerns that Demand Would Exceed Supply

November 17, 2010 at 23:31 by Vladimir Vyun

Wheat futures gained today, recovering from the lowest level in six weeks, on speculation that global demand would exceed supplies. Analysts predict that global usage will jump to a record of 668 million tons this year. The world wheat harvest may decline 5.1 percent to 647.7 million metric tons, the lowest level in three years.

The US Department of Agriculture forecast that global inventories of wheat will total 172.51 million metric tons at the end of the marketing year on May 31st, 12 percent down compared to the previous year. Global wheat output will total 642.89 million tons in the marketing year, which began June 1st, according to USDA. Some economists argue that world production may rebound to 661.52 million metric tons next year.

March futures for wheat delivery gained $0.0675 (1 percent) to $6.715 per bushel as of 13:15 on CBoT. Wheat dropped 6.7 percent yesterday on speculation that China will take measures to cool its economy. Prices have rose 40 percent since the end of June as global production deteriorated because of adverse weather.

If you have any questions and comments on the commodities today, use the form below to reply.

One Response to “Wheat Gains on Concerns that Demand Would Exceed Supply”

  1. Grain Marketing

    Prices often rise sharply on crop concerns to ration expected tight supplies, but the rally ends as prices reverse and decline quickly. Demand driven markets or price uptrends based on strong demand tend to last longer. Prices are supported in order to attract grain deliveries to continue meeting the substantial needs of users.

    [Reply]

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