Wheat futures gained on Monday, as commodity futures brokers and traders projected that hot weather may threaten crops in southwestern Australia and the U.S. will have to step in with further exports to meet global demand.
On the Chicago Board Options Exchange, wheat futures for September delivery gained 9.4 cents to $7.142 per bushel, while the December delivery contract rose 10.2 cents to $7.472 per bushel.
Other agricultural commodities gained as well: Soybeans for January delivery rose 4 cents to $10.442 per bushel, while corn futures for December delivery gained 6.6 cents to $4.85 per bushel.
"People are sensitive to the dry weather forecasts," Brian Grete, the senior market analyst at Professional Farmers of America in Cedar Falls, Iowa, told Bloomberg News. "Demand for U.S. grain should increase."
Nervousness about drought is understandable – it was the scorching weather and dearth of rain that seared Russia's wheat harvest and led the nation to ban grain exports until the end of 2011.
The U.S. Department of Agriculture reported that total U.S. exports of wheat between June 1 and September 2 rose to 15.1 million tons, an increase of 59 percent from the same period last year. It's clear that the U.S. has become the wheat supplier of last resort for the global food markets.
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