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Sugar Down; Wheat Prices Volatile

February 3, 2011

NASDAQ: Sugar futures traded on the New York Mercantile Exchange plunged over 9 percent on Thursday.

The fundamental reason is that the tropical storm Cyclone Yasi, which struck Queensland, Australia, did not disrupt the country’s sugar production as much as initially feared. Australia is the third largest sugar exporter in the world.

“There was 5.7-million tonnes of cane still left unharvested, that majority of which was in the regions of Burdekin and Central, which appears to have escaped any major cyclone damage,” said the Australia & New Zealand Bank, reported Agrimoney.

Read more: http://community.nasdaq.com/News/2011-02/sugar-futures-plunge-9-percent-in-one-day-what-happened.aspx?storyid=56207#ixzz1CwLve9Y7

This morning wheat was also down….
March wheat was down 6 1/2 cents late in the overnight session. The US dollar was higher and traders continue to monitor the Egypt situation. The continued bullish tone for food agricultural futures including wheat, rice, vegetable oil, dairy and sugar provided solid support to the wheat market recently, and bitter cold weather in the plains overnight might have caused some damage to the winter wheat crop. The market traded nearly 10 cents higher on the session overnight before pushing down to more than 6 cents lower late. Ideas that the cold weather has peaked for now and ideas that Egypt violence means it will take longer to see a stable government tha would boost food imports helped to pressure the market. Wheat surged higher on the session yesterday and even saw a late rally to push nearby March futures to a new contract high. Bitter cold weather is moving out of the plains for the next few days. Ideas that North African and Middle Eastern countries will continue to stock up on food items added to the positive tone yesterday, but worsening conditions in Egypt into the evening there helped support a bounce in the US dollar and trigger a setback in the wheat market.

Read more: http://community.nasdaq.com/News/2011-02/preopening-wheat-market-report-for-232011.aspx?storyid=56086#ixzz1CwMLlNwB

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