Wheat soars on Mideast demand
Prices also boosted by UN warning of 'serious' Chinese drought
U.S. wheat prices hit 2½-year highs Tuesday amid a spike in demand from Mideast and North African countries trying to increase inventories after soaring food prices helped spur unrest in Egypt, Tunisia and Yemen.
March wheat finished up 1.8 per cent at $8.7425 US a bushel on the Chicago Board of Trade after reaching $8.8075 earlier in the session.
Jordan's purchase of 100,000 tonnes of U.S. wheat Tuesday as well as continued "strong and urgent" demand from Middle East and North Africa countries helped to support prices, the Chicago Mercantile Exchange reported on its website.
Egypt, Iraq, Turkey, Bangladesh and Algeria have already been in the market this month and Iran and Saudi Arabia may be "soon," the CME Group said.
Egypt is the world's largest wheat importer, where half of the 80 million residents rely on subsidized bread to survive.
Chinese drought also a concern
Traders were also concerned about the effects of drought on the wheat harvest in China, the world's largest consumer and producer of wheat.
The UN's Food and Agriculture Organization (FAO) issued a special report warning that drought poses a "serious problem" for China's wheat harvest.
The FAO warned that "substantially below-normal" rainfall since October in the North China Plain, puts at risk the winter wheat crop to be harvested later in the month of June.
The region produces two-thirds of China's national wheat production.
Wheat prices have soared over the last year as drought in Russia and flooding in Canada and Australia have affected harvests.
The FAO said 5.16 million hectares out of a total of 14 million hectares planted with winter wheat might have been affected by low rainfall and snow cover.
It said more than 2.5 million people are experiencing shortages of drinking water and that 2.8 million livestock have also been affected.
The FAO said the situation will become critical if the winter drought is followed by one in the spring.