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Dennis Gartman: Food Supply Has Just Been Materially Reduced
CNBC.com | January 12, 2011 | 06:23 PM EST

You probably know about the latest USDA report ; it showed America’s grain stockpiles were at their lowest levels in years. The news sent corn and soybeans to limit up on Wednesday. But do you about what’s happening overseas and how it’s driving prices, too?

Australia's unprecedented floods continue to devastate the country leaving an area larger than France and Germany combined under water. And that includes key farmland.

As a result, ”The winter wheat crop in Australia has been absolutely destroyed,” explains strategic investor Dennis Gartman and author of The Gartman Letter.

He goes on to say there’s no way to replant in time for this harvest. “There’s now demonstrably less wheat available to the world – because of what’s happened.”That upsets the balance of supply and demand which means prices are likely going higher. “The world needs food and food supply has now been materially reduced,” he says.

Because most retail investors don’t trade futures contracts, Fast Money host Melissa Lee asks Gartman for some ETF suggestion.

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