The prices for wheat closed the previous week by 16.5% higher, which is the record since June 2007. Bloomberg informs, that on May 21, the contracts for wheat with the delivery in July continued growing and reached the mark of $7.22 per bushel (over 35 litres). The wheat has not been so high since September of 2011. The investors are buying the contracts for wheat and other agricultural product (corn) anticipating the torrid summer and as a consequence, poor crops in the main countries delivering wheat on the world market with Russia and the USA firstly. Moreover, the drought can occur in Kazakhstan and in the Ukraine as well, which also have an important role on the world wheat market. A sharp growth of the CFD cost followed a falling of futures by 21% annually: the crop of 2011 was close to the record in many countries, thus the offer exceeded the demand on the market. In 2010 Russia had to ban the export of wheat to the local companies as it aimed to avoid the prices growth on the domestic markets. This was the reason for the country losing its positions on the global market, however, in 2011 the deliveries renewed. Since July 1, about 25 million ton of the Russian wheat was sold, with the forecasts of the Ministry of Agriculture being 27 million ton per year. Considering the export of wheat (about 20 million ton) Russia is the second after the USA.
*The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.
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