27.01.2010 00:35

Wheat Futures Fall on Speculation China to Slow Economic Growth

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27.01.2010 00:35

Wheat prices fell for the third straight session on speculation demand for U.S. grains will decline as China limits lending to slow economic growth. The Reuters/Jefferies CRB Index of 19 raw materials dropped to a five-week low. Wheat has slumped 8.8 percent this month as mounting global inventories outweigh an increase in weekly U.S. exports.

“China comes out and gives the idea that they’re trying to slow things, and we go back on the defensive,” said Jason Britt, the president of Central States Commodities Inc., a broker in Kansas City, Missouri. “The fundamentals are taking a back seat to everything else. I had a client call and tell me to get even on everything. He said he’s tired of riding it down.”

Wheat futures for March delivery fell 4.25 cents, or 0.9 percent, to $4.94 a bushel on the Chicago Board of Trade. The price has dropped 17 percent in the past year.

The dollar gained today against a basket of six major currencies, eroding the appeal of U.S. grain exports.

“When there’s weakness in the markets, it doesn’t take much to push them down,” Britt said. “We look at the dollar and say that’s a reason.”

Wheat is the fourth-biggest U.S. crop, valued at $16.6 billion in 2008, behind corn, soybeans and hay, government data show.

By Tony C. Dreibus

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