Wheat has been the best-performing component on the Deutsche Bank Liquid Commodity Index (DBLCI) in 2011, rising 14.9%, Lewis of Deutsche Bank wrote in a weekly commodities report.
The analyst believes wheat returns have been driven higher on worries that freezing weather in the U.S. and droughts in northern China could damage crop yields. "We believe price spikes in this complex are a growing threat particularly in an environment where governments employ export bans to ensure food security," he said.
In a previous report, Lewis had also noted that droughts that devastated crop production in the former Soviet Union and the subsequent decision by Russia to stop grain exports last summer had lent support to wheat prices.Too much rain in the European Union, Canada and Australia had also contributed to production problems, Lewis had noted.
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV