Monday, June 29, 2009

When we said it was speculations they laughed at us

"Excessive speculation on the futures market fuelled last year’s wheat price surge that led to higher prices for industry and consumers, according to the results of a year-long Senate investigation.

Wheat prices peaked in March 2008 at $13.34 a bushel, but disparities between cash and futures prices first emerged in 2005. The futures price has since landed above the cash price by as much as $2 a bushel, undermining the market’s value as a hedging tool. High prices were further exacerbated by soaring energy and fertilizer costs and an increased demand for grain from rapidly developing nations such as China and Brazil."

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