Posted on 01/13/2011 2:09:33 AM PST by markomalley
Evidence of tightening global food supplies grew as the U.S. Agriculture Department cut its estimates for global harvests of key crops and raised some demand forecasts, adding to worries about rising food prices.
Prices of corn and soybeans leapt 4% Wednesday and wheat gained 1%, continuing the broad rally in commodity prices that began in June. With yesterday's gains, prices of corn futures contracts are now up 94% from their June lows; soybeans are up 51% and wheat is up 80%.
The USDA's revisions reflect the impact of dry weather in South America and floods in Australia, which have compounded supply constraints that first started to emerge in the middle of last year, when a drought in Russia ravaged that country's wheat fields. The agency also cut estimates for U.S. harvests of corn and soybeans.
At the same time, demand is increasing. The USDA said ethanol producers likely will increase their use of corn, and consumption by emerging market countries continues to be strong.
Prices of many agricultural commodities are still below the levels that sparked food riots in poor countries around the world in 2008. But economists see few signs that prices for grain, livestock and cotton will cool significantly anytime soon, signaling potential headaches for consumers and food companies.
"The markets are very, very tight," said Joseph Glauber, the USDA's chief economist. "There is concern, no doubt."
The strain on the world's food system is making policy makers nervous. The World Economic Forum cited rising demand for water, food and energy as a risk facing the world, in a separate report releasedWednesday.
A rising global population and greater prosperity, said the report, "are putting unsustainable pressures on resources." The report also raised the specter of shortages, which could "cause social and political instability, geopolitical conflict and irreparable environmental
(Excerpt) Read more at online.wsj.com ...
Prices of corn and soybeans leapt 4% Wednesday and wheat gained 1%, continuing the broad rally in commodity prices that began in June.
WHAT useful function do those bastard commodity dealers serve?
if you’re lucky you can buy the stuff in advance at a sale price
if you’re not lucky you get hosed
And since everything now contains soy...we’re going to get screwed royally.
Market traders can't escape reality, at least not for very long. The rising prices here are a functional of reality (shortages relative to demand), not "greedy" people. (Consumers and producers are all "greedy"; it's just human nature). We could do without the Marxist rhetoric here on FR.
Hear! Hear! It's amazing to me how much of it there is on an ostensibly conservative board. An indication, I suppose, of how deeply Marxism has sunk into our culture.
If you think I’m a “Marxist” you’re out of your mind.
You weren’t accused of being a Marxist, just of parroting their speech.
It sounded like Marxist speech to me too.
Isn’t dealing in commodities like buying up all the water in an area and then jacking the price up to whateveer level you feel you want?
Are there any links to exactly what commodity dealing involves?
I’m not very schooled on commodity trading, I’m much more familiar with farming/marketing etc. I retired from farming in 1987.
However, I can assure you that it is impossible for commodity traders can buy up, or even control, any significant portion of most (and I think all) crops.
Most farmers just won’t, by their own self-interest designed marketing plans, go that route.
Someone more familiar with commodity trading is needed to give a good answer, but I’d guestimate that commodity traders control only very small percentage of most crops.
Thanks for your input on this.
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