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| Wheat Plunging as Stockpiles Climb to 10-Year High in forum [SoftCommodities]
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Fidgit
Posts: 17784
Incept: 2008-02-18
Tax Unit #1,384,923,781
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I know some of y'all hate to hear good news, but... ;) Quote: Nov. 4 (Bloomberg) -- Wheat is heading for the biggest slump in three years as the second-largest harvest on record swells stockpiles, easing shortages that drove global food costs to an all-time high.
Prices that plunged 21 percent to $6.24 a bushel this year in Chicago will probably drop as low as $5.90 before the end of December, according to the median estimate of nine analysts and traders surveyed by Bloomberg. Supply in the 12 months ending June 30 will expand 5 percent to 684 million metric tons, boosting inventories to the highest in a decade, the London- based International Grains Council estimates.
Production is expanding after last year’s 47 percent price rise led farmers to plant more grain, while Russia and Ukraine recovered from drought that ruined crops. Cheaper wheat will reduce strains caused by rising corn and rice prices and add to pressure on United Nations-monitored food costs that have declined 9 percent from a record in February.
“The wheat is looking beautiful, there’s so much of it,” Bruce Ley, 45, said from his farm near the town of Mullewa in Western Australia in a region known as the Wheatbelt. “I’m a bit worried that the global wheat glut may reduce prices but there’s nothing I can do about that. I’ve just got to harvest the stuff and get it to market.”
Commodity Index
Wheat is heading for its biggest annual decline since 2008, when the IGC says harvests reached a record, and is this year’s third-worst performer in the Standard & Poor’s GSCI gauge of 24 commodities, followed by nickel and cotton. The index gained 2.7 percent since Jan. 1, versus a 7.7 percent drop in the MSCI All-Country World Index of equities and an 8.5 percent return on Treasuries, Bank of America Corp. indexes show.
Harvests are rising in Canada, Russia, Kazakhstan and Ukraine, among the worst hit by last year’s weather, according to the IGC, which includes more than 50 nations. While demand will expand 22 million tons, compared with 3 million tons a year earlier, stockpiles will still grow to 202 million tons, the IGC estimates. That’s 53 percent more than in 2007-2008, when prices reached a record $13.495.
Wheat may rebound should livestock and poultry farmers use more in feed as a substitute for higher-priced corn, according to Rabobank International. Corn trades at a premium of about 19 cents a bushel, compared with an average discount of $1.83 in the past five years, data compiled by Bloomberg show. While China’s corn harvest may gain 6.7 percent to a record this year, according to an SGS SA survey for Bloomberg yesterday, higher demand may still boost Chicago futures, Newedge USA LLC said.
Much more at: http://www.businessweek.com/news/2011-11....
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Lowbeyond
Posts: 16937
Incept: 2008-02-11
CO aka West NJ/East CA
Online
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Quote:“The wheat is looking beautiful, there’s so much of it,” Bruce Ley, 45, said from his farm near the town of Mullewa in Western Australia in a region known as the Wheatbelt. “I’m a bit worried that the global wheat glut may reduce prices but there’s nothing I can do about that. I’ve just got to harvest the stuff and get it to market.”
Ahh, someone with what sounds like - pride. WhoWouldaThunkIt.
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Maybe it was a birdy bread-bomber from the future?!
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