FX.co ★ Grain review for April 25, 2011

Futures on grain grew by over 3% on Monday amid expectations of bad weather which may suspend working fields and result in less crops.
By the end of CBOT trading July futures on wheat increased by 26 ½ cent (3.2%) up to USD 8.61 ¼ per bushel. July contract on corn closed with a gain of 24 cent (3.2%) and constituted USD 7.88 ½ per bushel.
Traders have been rather concerned about wheat crops under the conditions of dry weather in Europe and in the southern part of the US Great Plains. The rainless weather has already had negative impact upon winter wheat crops. In the US northern regions however precipitations led to suspending agrarian activity which may cause decrease in harvest this year.
Market participants have been thoroughly observing the weather conditions in the major regions of grain cultivation after last year Russia imposed an embargo on wheat export due to draught. Since then the prices soared up to their 2.5 year highs.
The USA need to have substantial grain crops this year to replenish their reserves remaining on their 15-year lows.
Earlier this month futures on corn hit record highs amid strong demand and declining reserves. Yet, at the moment the prices showed a 3% rollback.