Tuesday February 26, 2008

Wheat breaches $12 for first time after biggest gain since 2002

bloomberg.com :

Chicago wheat prices rose by the most in more than five years, breaching $12 a bushel for the first time on signs that global crop production isn't keeping pace with demand. Corn and soybeans also gained close to records. Soybean futures, which reached a record $14.855 yesterday, have gained almost 90% in the past year after U.S. farmers sowed the fewest acres in 12 years and planted the most corn since 1944.

Global wheat stockpiles probably will fall to a 30-year low of 109.7 million metric tons, the U.S. Department of Agriculture estimates. Wheat for May delivery rose by the daily limit of 90 cents to $12.145 a bushel in after-hours electronic trading on the Chicago Board of Trade [CBOT], the biggest one-day gain since October 2002. Futures have more than doubled in the past year as adverse weather reduced output in Europe, Canada and Australia.

On the Minneapolis Grain Exchange [MGE], wheat for May delivery advanced $1.35 to $18.4325 a bushel. The March contract, which has no limit because it is the closest to delivery, rose as high as $24.26 a bushel, after yesterday becoming the first U.S. wheat contract to top $20 a bushel. On the Kansas City Board of Trade [KBOT], futures for May delivery also rose the exchange limit of 90 cents to $12.65 a bushel. Wheat was the fourth-biggest U.S. crop in 2007, valued at $13.7 billion, behind corn, soybeans and hay, government data show.

- Prices of bread, noodles, and other flour-based products are going to go up again. And I was just talking about "way over $10 wheat" in the post just before this one. I should really be hedging my exposure to rising food prices. I've added two agricultural ETF's to my watchlists - just a matter of time before I pull the trigger.

See also :

1. Wheat price rises above $10 for first time on supply concerns
2. Wheat hits record $11.53 on supply concerns
3. Bread and inflation
4. Why food costs more

(2008-02-26 14:00:45 SGT) [Biz] Permalink

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