On Wednesday wheat futures initiated a new upside move and refreshed a 29-month high. Recently the surge in the world export demand has been the main trading driver. This time Algeria buying wheat was the major news.
The results of the trading in the Chicago Board of Trade March wheat futures advanced 18 ¼ cent or 2.2% to $8.56 ½ for one bushel.
Algeria bought 800 000 tons of wheat on Wednesday and 1.8 mln tons for January, which caught certain attention of speculative market participants. Amid this, wheat prices reached the highest level since March 2008.
Governmental purchase of crop increased these days after the events in Tunisia, Jordan and Egypt. Rising food prices are causing discontent among the population of these countries.
Wheat prices have doubled since last summer amid the embargo put on crop export from Russia and news from Australia about worsening quality of local wheat yield caused by high humidity during ripening and harvesting. Wheat yield in Canada is also causing concerns after showers, while in the US there is a severe drought and no significant precipitation expected during next 10 days.
