Going Green

Thursday, September 27, 2007

Rising Prices for Wheat

It looks like wheat prices are headed up with tightening supplies...

Wheat Rises to Record as Ukraine Cuts Exports, Stockpiles Low

By Jae Hur

Sept. 27 (Bloomberg) -- Wheat rose to a record as Ukraine planned to cut exports and importers sought more supplies, squeezing inventories that are heading for a 26-year low.

Ukraine, the world's seventh-biggest wheat exporter last year, will curb shipments starting Nov. 1 to cap domestic prices. A drought in Australia threatened to ravage the harvest for a second year. Egypt, Iraq, Japan, Jordan, Morocco and Pakistan announced plans this month to buy the grain.

Wheat futures in Chicago reached as high as $9.3925 a bushel and more than doubled in the past year. Rising prices are pushing up inflation in Australia and China, while increasing costs for U.S. cereal makers General Mills Inc. and Kellogg Co.

``We can not rule out $10 for wheat,'' said...(complete article here).

The high price of wheat will help balance the demand to convert land to fuel crops. It will have an impact on the consumer food dollar.

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