A fall in US inventories of wheat to a 60-year low drove prices of the grain sharply higher on Friday to a fresh record, intensifying fears of rising global food price inflation.
US wheat futures – global benchmarks for the grain – have jumped by their daily trading limit each day this week. Prices for Minneapolis wheat, the US variety most suitable for making flour, rose 10.7 per cent on the week, extending its price surge since the beginning of the year to 50 per cent.
“We are in uncharted territory,” said James Bower of Bower Trading. “The market is desperately trying to tell global producers that we need more acres for wheat production...”
“The US has sold too much wheat and will have to import, probably from Canada, to satisfy its domestic requirements,” said a hedge fund manager. “This will have a major impact on the rest of the world if consuming countries can’t buy US wheat and Europe becomes the global supplier.”
Global stocks of wheat are expected to fall to a 30-year low as consuming countries have scrambled to ensure they have enough supplies for domestic consumption.
♠ Posted by Emmanuel in Agriculture at 2/09/2008 10:36:00 PMAs the price of a bushel of wheat has slammed through the $10 level with relative ease, fears are growing in the US and elsewhere that food prices will escalate further as well. The Commodities Futures Trading Commission has increased its price increase limit for a bushel of wheat as trading limits have been hit on a daily basis as of late. Truly, a new age of agricultural renaissance may be upon us after years of worry about stagnant or dwindling commodity prices. Hats off to Jim Rogers who saw it all coming well before the rest of us. Rogers' reputation as a legendary investor is burnished further. From the Financial Times comes this story: