“This is not just a speculative investment bubble, there is physical wheat changing hands at these prices,”
------------------------------------------------------- Grain prices white-hot again Wednesday, 15 August 2007
The continued spate of wheat production woes across the globe, as the northern hemisphere harvest gets underway, has seen grain prices spiral to mammoth levels this week.
This week, for instance, we've seen:
• Chicago Board of Trade (CBOT) December wheat futures rise above US700 cents a bushel for the first time ever
• Australian Stock Exchange January 08 wheat futures reach a settlement price of $A300/tonne
• Forward malt barley prices with ABB soar above $300/tonne delivered port, to reach $304/tonne at the Victorian ports on Wednesday, a spike of a staggering $36/tonne since last Wednesday
• Canola prices rise perilously close to $500/tonne, before easing back to $486/t with ABB on Wednesday.
Commodity analyst Malcolm Bartholomaeus says the steady stream of negative news dating back to April, has seen the world crop prospects continually shrink, as the northern hemisphere harvests get underway.
“It started in the US with freeze damage in April, then it rippled through to the wet conditions in US harvest, and the dry hot finish in Canada,” he says.
“Add the floods in western Europe and the drought in Russia and the Ukraine and you can see where the production pressure is coming from.”
And the final piece of the jigsaw could be Australian conditions.
“Our own situation, hasn’t hit the news, but it could be the next contributing factor if we lose two or three million tonnes off previous production estimates,” he says.
A lack of winter rainfall is catching up with many crops, as growers anxiously await good follow-up rains.
“This is not just a speculative investment bubble, there is physical wheat changing hands at these prices,” he says.
SOURCE: Breaking national grains news from Rural Press weekly agricultural papers, updated daily on FarmOnline.
