Thursday, November 13, 2008

Up and down: the food crisis never ends, it just changes direction

I was told by a trader last week that wheat prices had crushed and that this was going to cause major distress in the markets. Apparently everyone and their cousins planted wheat in eastern Europe last year and there is now a major glut. Here's the news from the US

"Wheat prices continue to slide in the US Agriculture Department's latest monthly forecast of commodity prices, based largely on a slowing global economy and strong overseas production.

World Ag Outlook board chair Gerald Bange says USDA's season average wheat price forecast is now down to $252 a ton, from $257 last month.

"We've got a world wheat production now, which is up more than 70 million tons from last year, we still have strong world coarse grains production, we still have strong world oilseeds production, we're seeing these prices wind their way down." "

Russian wheat "The wheat averages 3,400 ruble a ton now" That's about 123USD!

More news on other grains:

"The yield from fall harvest has been strong for area farmers. Unfortunately, like the stock market, prices paid for grain have crashed.

In July, the price of corn was $7.10 a bushel. Today, it's half that — $3.47.

And soybean prices are worse. Four months ago, soybeans were selling at $16 a bushel. Today, the price is $8.58. And when the fall crops were planted, the cost of fertilizer and fuel were at all-time highs.

It's tough on the farm."

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