Russia is a major wheat exporter and shortfalls there will effect wheat futures in Chicago.
European wheat futures have jumped 30% in just the past nine weeks.
The Russian Grain Union on Monday lowered its forecast for the 2010 harvest to between 72 million and 78 million metric tons, helping boost Chicago wheat futures to the highest level in 22 months.
The news that more U.S. wheat customers were raising concerns initially pushed wheat futures lower for the second day in a row, as traders weighed the threat that the discovery of modified wheat could pose to demand.
Argentina's wheat-futures market vanished in March 2008 when, after a ferocious spat with the farmers, the government restricted exports.
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In February the Forward Market Commission, the commodities market regulator, banned wheat and rice futures in a bid to cool down food-price inflation.
However, industry sources believe exposure the ETN was holding to corn, wheat, soybeans and sugar futures was nearing limits that might attract the attention of regulators at the Commodity Futures Trading Commission.
But everything from foreign currencies (the Canadian, Australian and New Zealand dollars all test record highs) to precious metals (setting new records almost daily) and crop futures (corn and wheat have nearly doubled this year).
For fund investors, good bets are the Market Vectors Agribusiness ETF (MOO), whose top holdings include ag biotech giants Monsanto and Syngenta and tractormaker Deere, and the Invesco Powershares Agricultural ETF (DBA), which invests in a range of commodities futures, from Kansas wheat to feeder cattle to soybeans, cocoa and corn.
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There is thus little threat to Kansas City's main product, futures and options on hard red winter wheat.
It is designed to imitate the futures market in commodities such as corn, wheat and steel.
These exchanged funds (ETFs) purchase a variety of agricultural commodity futures, and increases in the price of wheat, corn, cattle, and other food prices will benefit shareholders of these securities.
The futures and options markets for rice are, compared to wheat and maize, woefully undeveloped.
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We have the futures markets: the future price of corn and soy and wheat has gone up.
The note consists of futures of contracts of seven agricultural commodities (soybeans, corn, wheat, cotton, soybean oil, coffee and sugar) and tracks the return of the Dow Jones-UBS Agriculture Total Return Sub-Index.
The futures and options markets for rice are tiny as compared to maize or wheat.
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