businessweek.com.
'Grain Prices Rally Toward 2008 Records on Shrinking World Supply'
Feb. 9 (Bloomberg) -- Corn, wheat and soybean futures jumped to the highest since 2008 after a U.S. government report showed smaller crops and rising demand are eroding global inventories as food prices surge.
"There is not one crop you can point to that is without supply problems,” Steve Nicholson, a commodity procurement specialist...
Before today, the price of corn, used to make livestock feed and ethanol, jumped 89 percent in the past year, wheat was up 81 percent and soybeans rallied 54 percent. Last week, rice futures reached the highest since 2008.
“Increased consumption around the world eroded stockpiles,” Roy Huckabay, an executive vice president at the Linn Group in Chicago, said before the report. “The current supply-and-demand imbalance looks to last for multiple years and has emboldened new investment money to flow into agricultural futures.”
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Corn soars as US inventory forecasts drop
Corn jumped to prices not seen since the 2007-08 food crisis after the US government said inventories of the agricultural staple would equal their lowest level on record this year.
In its closely-watched monthly report on global agricultural markets, the US Department of Agriculture said on Wednesday that corn demand for production of ethanol and sweeteners would be undimmed by current high prices, upgrading its consumption forecasts.
That means stocks in the US – the largest exporter of the grain, controlling more than 50 per cent of the global market – will fall to 675m bushels, down 70m from last month’s estimate, according to the USDA. Relative to consumption, that equals the lowest level on record, set in 1995-6, when corn prices surged 160 per cent in little over a year
In the US: Expect to pay more at the pump and the grocery store. In the rest of the World: Expect more riots.
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