Tuesday, July 20, 2010

Wheat Falls Again on Egypts' Russian Deal

Wheat prices fell for the third straight trading day, as Egypt decided to go with Russia to buy their latest wheat. Egypt acquires the most wheat in the world.

In the latest deal Egypt bought 120,000 metric tons from Russian, This surprised some because of news of the ongoing drought in Russia, which many thought would force Russia to cut back on exports to be sure their own people had enough.

Some analysts believe US wheat isn't priced accurately, and it shouldn't have been assumed that because of news of the drought, Russia would be storing their wheat and not engaging the market.

Another factor in wheat prices falling is the realization it won't be needed to feed livestock in the US because of a potential shortfall in the corn harvest, which conditions have changed because of good weather providing lower temperatures and rain to corn fields in the Midwest.

At 10:00 AM EDT, wheat futures for September delivery dropped 8 cents, to $5.7425 a bushel, or 1.4 percent.

Wheat generates $10.6 billion in the U.S., which is the world's largest exporter.

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