U.S. Wheat Futures Hit Record $10 A Bushel Mark Amid Dwindling Supplies

New York, NY (AHN) - Wheat prices have soared above a record $10 a bushel Monday. The strong demand for the grain around the world has raised concerns over wheat shortage in the U.S. in 2008 as food prices surge to even higher levels.

The Chicago Board of Trade WH8 contract gained more than 3 percent to hit a record high of $10.09.

Partly due to a drought in Australia, wheat prices have increased twofold since last year. This has brought about fears of food price inflation in a global economic environment that is slowing.

"We think agricultural commodity prices are going to continue rising, (with the scale) depending on the climate and the state of the harvests," said Moncef Kaabi, head of commodities research at French investment bank Natixis, reports BBC News.

Wheat supplies have decreased in the U.S. this year as wheat crops have been destroyed around the world due to bad weather. The result has been a rush to obtain wheat at any cost with U.S. wheat exporters selling more than 90 percent of the 1.175 billion bushels, the U.S. Department of Agriculture estimates will sell in the whole marketing year - ending in June, 2008.

"Globally, other economies are much stronger. China is up significantly, India is up significantly, and Russia's economy is much stronger," Mark Schultz, chief analyst with Northstar Commodity, reports The Associated Press.

He added, "So when we used to run wheat prices up high, years ago, they didn't have the money and they didn't buy much of the product. Now prices run up and they're still buying."