As Russia continued in parts of the long hot dry weather is expected to be eased, Chicago Board of Trade December wheat contract on the 16th dropped 38.0 cents to settle at 6.9625 U.S. dollars per bushel, down 5.2%. December corn and soybean November contract by the wheat contract fell by tired, were to close at 4.2275 U.S. dollars per bushel, and 10.315 U.S. dollars, declines of 1.1% and 1.2%.

International wheat prices in the August 5, after Russia announced the suspension of grain exports soared to new highs the past two years, a correction last week, this week continued the downward trend. This is mainly because the market panic on wheat production cuts are receding, some large speculative funds selling to lock in gains.

Weather forecast After days of heat waves and drought once every 130 years, Russia will mark the northern part of the recent cool weather, rain. In addition, Russia will comply with the Egyptian export contracts signed after market rumors also added to bearish for wheat.

Analysts generally agreed that, although there is no reason to fear the global food crisis, but the international grain market, there are still many uncertainties remain to closely observe the market trend.

First of all, the threat of food shortages still exist. Russia’s agricultural sector has the third reduction this year’s grain output expected to flood victims in India and Pakistan also to food crops is not optimistic.

Second, other grain exporting countries may follow the example of Russian grain export restrictions. It is reported that adverse weather at harvest, the world’s fifth-largest wheat exporter, Ukraine has also implemented a quota system for grain exports, Russia has proposed a customs union with Russia, Belarus and Kazakhstan to take measures to prohibit the export of grain.

The third is heavily dependent on Russia and Ukraine from importing grain in the Middle East, may turn their attention to Europe and the United States market. Egypt, Turkey, Pakistan and Azerbaijan last year, a large number of grain imports from Russia, many countries have begun to find another way out.

As the world’s largest wheat importer, annual wheat consumption in Egypt is about 12 million tons, 44% of the needs of all imports, fiscal year 2009 to 2010 nearly Liu Cheng wheat imports from Russia. Egyptian Government has already relaxed some restrictions on imports, also decided to North America were imported from France and 240,000 tons and 60,000 tons of wheat. According to “The Wall Street Journal” reported that U.S. Agriculture Secretary Tom Vilsack said that the Egyptian government had contacted the U.S. Department of Agriculture, in order to obtain information on the availability of U.S. wheat.

Finally, once the international market demand, pushing up food prices rose sharply in Europe and America, Keneng the Western economies had suffered a serious inflationary impact, Yinfa economic stagflation, affect the world economy Fu Su.

While food prices for food and agriculture and food exporters can benefit from, but it would damage downstream processing of agricultural products, meat, milk, bread and beer and other downstream product prices also face upward pressure. Slow economic recovery in Europe and America, against the background of high unemployment, soaring food prices, if, will increase the public burden, increase the risk of social unrest. Food prices may also lead to inflation, may fall into the Western economies, raising interest rates to control inflation or protect the fragile economic recovery dilemma.

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