Wheat Breaches $12 for First Time
Feb. 26 (Bloomberg) -- Chicago wheat prices rose the most in more than five years, breaching $12 a bushel for the first time as investors poured money into agricultural commodities on signs that global crop production isn't keeping pace with demand.
Global wheat stockpiles will probably fall to a 30-year low this year, while corn inventories are headed for the lowest since 1984, the U.S. Department of Agriculture said Feb. 8. Almost $1.5 billion flowed into farm commodities in the week to Feb. 19, investment bank UBS AG said in an e-mailed report yesterday. The UBS Bloomberg Constant Maturity Commodity Index of 26 raw materials has jumped 15 percent this year.
Wheat, soybeans, corn and palm oil are among commodities that have touched records this month, stoking prices of bread, pasta and noodles worldwide. The gains have driven up costs for food companies from Kellogg Co. to Premier Foods Plc and complicated efforts to curb prices in China, India and Malaysia.
``Agricultural commodities such as wheat are the place to be right now,'' Eugen Weinberg, a commodities analyst at Commerzbank AG in Frankfurt, said in an interview today. ``Production may be rising, but not at the pace necessary to keep up with increased demand.''
Wheat for May delivery rose by the daily limit of 90 cents, or 8 percent, to $12.145 a bushel in after-hours trading on the Chicago Board of Trade, the biggest one-day percentage gain since October 2002. It was at $11.615 as of 10:20 a.m. in London.
The exchange expanded its daily limit after the contract surged by the previous 60-cent limit yesterday.
TOP OF THE AGENDA: Wheat Prices Soar
Wheat prices climbed to historic highs, recording their largest one-day price rise in more than five years. The price rose 8 percent (Bloomberg) on the Chicago Mercantile Exchange before reaching a limit for one-day gains. The increase followed news reports that Kazakhstan, one of the world’s largest grain exporters, will impose export tariffs (FT) to curb sales amid a global rush for basic foodstuffs. The move follows similar tariff hikes in Russia and Argentina and comes amid one of the biggest run-ups in global food prices in recent memory. Wheat prices, the Guardian reports, have risen more than 25 percent since the beginning of January.
Experts say the rapid recent rise in global food prices has numerous effects. The Wall Street Journal reports that food prices, combined with the rising price of oil, have been a major factor contributing to inflationary pressures globally. The Financial Times reported yesterday that soaring prices may also compel the United Nations to cut food aid to developing countries. A new Daily Analysis notes a silver lining, however: rising food prices may also open a window for renewed global trade talks, long thought stalled, if major agricultural exporters reduce their own import tariffs to keep grocery stores stocked.
This inflationary surge will effect the poorest countrys the most and set them up for civil unrest,
a breeding grounds for Terrorists.
Stock up on your Wheat products NOW,
prices will double or triple, cereal, pasta, flour.