Wheat futures split on Wednesday against a backdrop of plummeting equities. In the short term, supply concerns loomed large: Russian drought and an export ban raised fears that a global supply shortage might ensue, or that export contracts might not be honored. CME wheat for September 2010 delivery rose 6.2 cents to $7.01 per bushel.
More price support came from comments by Ukraine, one of the world’s biggest exporters of grain, that it might cap wheat exports in response to the shortages, reported the Financial Times.
The World Bank, said the FT, is urging grain-producing nations not to engage in protectionist moves which could create another surge in food prices. “Export bans, while understandable from a national view, are counterproductive at the international level because they trigger hoarding and lead to further price distortions,” Ngozi Okonjo-Iweala told the FT.
On the other hand, longer-term wheat futures dropped: CME wheat for March 2011 delivery fell 7.2 cents to $7.374 per bushel, while July 2011 wheat slipped 27.2 cents to $6.862 per bushel. There’s some perception that long-term pessimism about supply may be overdone.
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