This is a big deal and if current trends continue, it will get bigger still:
Wheat futures gained in Chicago on expectations demand is increasing at a time of shrinking global stockpiles. Corn and soybeans declined as recent advances may have been overdone.
U.S. consumer prices rose the most in two years last month, while inflation was 6.9 percent in China and 3.1 percent in Europe. Inflation is accelerating as oil and other energy prices reached records in November, spurring investors to buy commodities as a store of value.
``The global backdrop of inflationary pressure is supportive for agricultural products as we head into 2008,'' Nie Ben, manager at Liaoning Cifco Futures Co., said by phone from Dalian in northeastern China today.
Wheat for March delivery, which reached a record $10.095 a bushel yesterday before settling at $9.66, today rose as much as 1.1 percent to $9.77 in after-hours electronic trading on the Chicago Board of Trade. They traded little changed at $9.6575 as of 12:17 p.m. local time in London. Global wheat inventories may drop 11 percent by May 31 to 110.1 million metric tons, according to the U.S. Department of Agriculture.
The sell-off in Chicago yesterday was partly stoked by a rally in the dollar to a seven-week high against the euro, said Nie.
``A strengthening U.S. dollar hurts all commodities including base metals and agricultural products,'' he said. ``Compared with base metals, the agricultural complex's performance was much more resilient.''