Chicago wheat hits 28-month high amid inflationary concerns

CHICAGO, Feb. 8 (Xinhua) -- Chicago wheat prices further hiked on Tuesday, hitting its 28-month high, as increasing concerns over inflation have prompted investors to stock up grains. Soybeans also joined the rising line while corn edged slightly lower.

The most active corn contract for March delivery fell one cent, or 0.15 percent, to 6.7375 U.S. dollars per bushel. March wheat gained 15.5 cents, or 1.8 percent, to 8.7425 dollars per bushel. March soybean dropped 9.75 cents, or 0.68 percent, to 14.3425 dollars per bushel.

Market traders noted that some importers are increasing purchase on the international market, as they concerned that the continued hike in grain price could trigger social instabilities.

CME Group Tuesday said in a report that Egypt, the world's biggest wheat importer, bought 55,000 metric tons of wheat from the U.S. on Feb. 5. Meanwhile, Iraq, Turkey, Bangladesh and Algeria have issued tenders since Feb. 6. Iran and Saudi Arabia may be in the market "soon."

Besides, China's lift of interest rate further intensified the inflationary worries. China on Tuesday announced to raise its interest rates for the first time this year, which sent a strong signal to the market that China was paying more attention to inflation.

On the soybean market, although the price was earlier pressured by talk of overbought condition as well as concerns that China's interest rate hike may slow its economy and reduce demands, the later rally, which is mainly attributed to expectation over reduced inventory estimate in Wednesday's report, helped to bolster the market and push up the closing price.

However, the corn price failed to sustain the selling pressure and closed lower.

(Source: http://news.xinhuanet.com/english2010/business/2011-02/09/c_13723262.htm)