Posted on 07/28/2010 10:58:16 AM PDT by blam
A Horrible Drought And Embargo Fears, Have Made WHEAT The Hottest Commodity In The World
The Macro Report
Jul. 28, 2010, 1:25 PM
Growing concern over the worst drought in a century in Russia, Eastern Europe and Central Asia have rocked the wheat markets in recent weeks, driving the CBOT contract to outperform Oil and Gold YTD (see chart).
Projections for the shortfall of combined Russian, Kazakhstani and the Ukrainian wheat exports run as high as 8MT lower than USDA forecasts and rumors of an export embargo by both the Russian and Ukrainian governments have been published by Bloomberg and other outlets. Here are some key data points drawn from recent issues of The Macro Report:
· Russian Agricultural Ministry has reduced harvest projections from 97 to 85 million MT, with potential for further declines due to dry weather.
· Kazakhstan's ministry of Agriculture estimates that this season's wheat harvest will total 13.5-14.5 million MT, a 40% Y/Y decline. With 7 million MT in supply remaining from last season, the ministry does not anticipate supply issues domestically, but it may impact exports.
· The Ukrainian agriculture ministry has adjusted its projections for grain harvest levels to 42 million MT versus 49 million MT last year, still higher than independent projections.
· Canadian forecasters have cited citing crop damage and lower planting levels caused by persistent wet weather this year. Total land unplanted due to conditions may exceed 4 million acres, with anecdotal reports that late planted crops may be severely damaged.
[snip]
(Excerpt) Read more at businessinsider.com ...
Revelation 6:6
Then I heard what sounded like a voice among the four living creatures, saying, “A quart of wheat for a day’s wages, and three quarts of barley for a day’s wages, and do not damage the oil and the wine!”
They’re trying to say it’s the lack of an Indian central bank that’s doing causing that inflation? Or the speculation because of the lack of transparency?
You do know that near term contracts for wheat on the CME trade for less than half their 2008 prices, don’t you?
Nope...I didn't know that.
Wheat marketers literally “stole” the local wheat production recently. The local elevator price was as low as $2.38 per bushel at one point, and there were 2 days when they would not even buy grain (blamed it on the Gulf oil spill, Cargill lie) It has recently risen but it is not at record prices.
My family has farmed in this county in Texas for 110+ years. We stored all we could store on the farm because of the low price at harvest. (about 15,000 bushels) Not very much of our production. Most of what we harvested and sold went for just under $3 per bushel.
If you go hungry this year, don’t blame the farmers. Blame the monopolists and the government.
If you look at COT reports, you’ll see that there’s quite a bit of short position out there, expecting the price to go down.
When we were up in Montana on Monday, the wheat crop sure looked nice and plump, and the custom guys were coming into the country from all over - some of them obviously running behind schedule because they hadn’t even washed down their machines from whatever job they had south of MT.
What are you seeing for basis in your country?
Looks like it’s time to buy more flour before the price begins to rise.
A lot of this is commodity speculation. When the US crop comes in, it will likely be a bumper one and, being fungible, will be shipped out to replace the Black Sea area crop. Just as the US is harvesting that good crop, planting will begin in the Southern Hemisphere.
I have seen this scenario over and over again in the past. At worst, there is a period between the Southern Hemisphere planting and harvest when the prices will either spike or plunge, depending upon their weather conditions and there may be a small temporary price spike in the US.
As the poster above states well: only a few pennies/bushel go to the farmer, even when prices are high. The farmers have the highest cost of inputs and storage, not to mention regulation. It is the brokers who make the most money.
If you have space, will and means to store flour, you can purchase it in 25# sacks at Sam’s. I haven’t checked Sam’s lately, but the price for 5# sacks at Aldi’s and Walmart have stayed stable over the past few months to a year.
I have been the family baker for 30 years. Normally I keep at least 50 lbs. of flour in the pantry. And I keep a pound of yeast in the refrig.
We tried to promote hard white winter wheat production here for about 10 years. 2 years ago the Cargill owned distribution elevator doced us $.50 per bushel because it was hard white not hard red wheat. Quality in all aspects was better. That killed the interest locally, we had about 5,000 acres planted that year. (we are seed producers)
The Plant Variety Protection Act has also raised the cost of seed production significantly. Some of the farmers have done dumb illegal stuff that cost them dearly. All of this plus the uncertainty of farming has made it more and more difficult to operate profitably.
Eventually the consumer will loose by having higher prices. The Corporate farming distribution system has been working for years to squeeze out the producers. If Corporate agriculture is in control of production, food will never again be cheap.
I live in the midst of farmers. I have so much empathy for how hard it is. I see younger couples with kids working Century farms mostly dairy, beef and row crops, here) and just barely staying alive while turning millions of dollars, of which they are lucky to keep a tiny fraction. I don’t know how any of you all survive, to tell the truth.
I have a friend who is a wonderful baker. I am only so-so. I keep 15#-20# of regular flour in 5 pound portions in the freezer. I know there are nuances to types of wheat and flour, but am not at all conversant with them. What is the difference between white and red wheat? I have only recently learned the value of converting bread recipes to weight instead of volume. I will likely return to baking bread when the weather cools down in the Fall. Hopefully, necessity will force me to become better at it.
All the commodities right now seem to me to just be herd mentality at work. I cannot think of any other reason for the swings I see in everything: forex, metals, grains...it all seems to just be oscillating in tune with whatever the press sets forth as meme of the day.
The difference between hard-red and hard-white is only the color of the bran. Caused by tannin content. The tannin is bitter and is removed in the milling process (in rolling mills). If you use whole wheat flour, hard-red is somewhat bitter and gives a destinctive taste when baked. If you use hard-white whole wheat flour it is not bitter. There are other reasons that the bran and wheat germ is removed in the milling process, they have to do with shelf life of the flour. (I do not refrigerate my flour, I use enough of it for that to not be necessary)
The difference in Hard and Soft wheat is primarily the gluten. Hard wheat has gluten and soft wheat (white or red) does not. Gluten is necessary for yeast leavened bread. Soft white wheat flour is the flour of choice for biscuits and some cakes. They make a lighter flour when baked. There is more to it than this, but this is simplified.
My family farmed long before there was a "government farm program". Some of the land my father and uncle farm was owned by their grandparents in the 1880's. Their parents farmed in Alabama and Georgia before the Civil War. They were burned-out during Reconstruction and came to Texas. (GTT)
All grains have one kind of gluten or the other, but it's "wheat gluten" that has the peptides that trigger the autoimmune reaction called CELIAC DISEASE. BTW, all other conditions that do the same thing in the presence of those peptides are called "wheat gluten intolerance" ~ and I got that in spades.
It doesn't matter whether it's hard or soft, red or white, or what ~ wheat will send me to the toilet in 30 minutes on the dot. You can set your digital clock on my intolerance!
What you were referring to was the PERCENTAGE of wheat gluten ~ durham is higher in total protein content ~ that is, wheat gluten ~ than is red wheat.
Now, returning back to my GLUTEN FREE BEER in celebration of my opthamological surgeon giving my eye an OK ~
Try rice flour.
You can also use white maize.
—
according to=>
http://www.csaceliacs.org/gluten_grains.php
There are grains/flours that are gluten free:
almond meal
rice flour
buckwheat flour
coconut flour
chestnut flour
corn flour
glandless cottonseed meal
millet flour
milo flour
potato flour
sesame flour
sorghum (milo) flour
soybean flour
dried water chestnut flour
http://en.wikipedia.org/wiki/Whole_wheat_flour
I have been the family baker for 30+ years. I know that soft white wheat will not work with yeast leavening, because of the lack of gluten. I did not intend to say it had NO Gluten.
That wheat is great for biscuits and cakes, leavened with baking powder.
You could increase your market 10%.
All the other flour types "fake it" ~ and they don't taste the same.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.