Paul Griepentrog (c)copyright 2010 All Rights Reserved

With high temperatures and drought affecting Russia and Western Europe the Russian government has announced a halt to all wheat exports and has placed additional security at storage facilities.  Russia, the third largest wheat exporter in the world has asked Belarus and Kazakhstan to halt exports as well to prevent price increases in domestic supplies.

No such luck here in the US as speculators are driving prices converting unstable US dollars into commodities.  Wheat prices have risen $1.97 a bushel, or 42 percent, this month and are at their highest level since September 2008.  It’s the biggest gain for wheat contracts according to records dating back to 1959 according to the Chicago Board of Trade.  This is deemed even more unusual for prices to advance during harvest a time which is normally the low point in the yearly cycle. 

Further problems exist as Western Canada was not able to plant 13 million acres due to wet weather. 

Argentina, Western Europe and here in the US reports also are indicating below normal yields accentuating the problem, meanwhile wheat closed limit up Friday on the CBOT.

Simply put look for anything from bread to cereal to increase in price putting yet another pinch in consumer pocketbooks already suffering from a declining economy.  With increases in wheat prices providing the catalyst for other grains to increase in price as well, affecting products made from other grains and the meat products dependent upon them.

Effectively the USDA and others have gotten caught with its pants down, their inflated crop numbers have caught up with them and the markets are viewing current report data with skepticism. 

Will this be the catalyst the gloom and doomers have predicted? 

Who knows, with today’s consumer addicted to convenience, lacking even the fundamental basics in regards to food preparation from scratch ingredients, let alone turning wheat into flour into bread, the situation we face regarding food supplies may be more grim than most could visualize or even want too.

For more information.

http://www.marketskeptics.com/

http://nogger-noggersblog.blogspot.com/