Chinese wheat crops likely are subject to significant damage as a result of drought conditions, which are expected to persist for at least the next month, Bloomberg reports.
As a result of the inclement weather in the world's largest producer of the grain, wheat futures are expected to continue climbing.
"We're not looking at anything other than cold and mostly dry" weather, Jim Dale, senior risk meteorologist at British Weather Services, told the news service. "It's probably going to do further damage, at least to the price in the short-term, because of the anxiety and the risks."
Just before 2:30 p.m., wheat futures were down 0.32 percent, a 2.75 cent slip to $8.695 per bushel.
Troubles in China, which bought 1.4 million metric tons of wheat from 2009 to 2010, could be significant, according to one industry observer.
"The scenario is that they have got less production, their reserve stocks have been drawn down, there are drought fears, so it's more than likely that they are going to look at replacing some more stock," said Tom Puddy, grain marketing chief at CBH Group, one of Australia's largest grain shippers. "We may see them look to buy more from Australia."
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