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Saturday 22nd of August 2009
July 21, 2006

Wheat futures up in US, Europe


by Elaine Frei

Prices for agricultural futures look to be catching up with rises in other commodities prices as heat waves in the United States and Europe have investors worried that crops will be affected at a time when cereals such as wheat and corn are at low inventory levels.

US wheat futures in several markets are 22 to 30 higher than they were at the beginning of the year as the US Department of Agriculture gets ready to announce that wheat stockpiles are at their lowest when compared to rates of consumption since records began to be kept in 1978. The USDA expects that wheat inventories will drop below 130 million tonnes by the end of this year to June 2007. At the same time, wheat futures in France and the UK were each up by over 8 percent this week, to €131.25 and £84.50 respectively. Some analysts believe that UK wheat futures could exceed the record of £116.25 set in December 2003.

Meanwhile, the price of crude oil was down during the week even though there has been no resolution to the latest political turmoil in the Middle East. Brent crude September contracts had added 70 cents to $74.42 per barrel by mid-afternoon in London on Friday, but was still down over 3.7 percent for the week. West Texas Intermediate crude for September delivery was also up on the day, by 58 cents to $74.85 per barrel late in the morning on the New York Mercantile Exchange, but it was still over 2.7 percent lower on the week.

In the metals markets, gold was $4 lower on the day and over five percent lower for the week, trading at $628.50/$628.90 per troy ounce. Three-month nickel was down to $23,675 per tonne on Friday, 12 percent lower than its record high of $26,900 per tonne, reached on Monday. Three-month copper was down 10 percent during the week to $7,225 per tonne, while zinc fell 9 percent to $3,115 per tonne and aluminium dropped 6 percent to $2,460 per tonne.

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