"“We have lent a huge amount of money to the U.S. Of course we are concerned about the safety of our assets. To be honest, I am definitely a little worried.” "

Chinese premier Wen Jiabao 12th March 2009

""We have a financial system that is run by private shareholders, managed by private institutions, and we'd like to do our best to preserve that system."

Timothy Geithner US Secretary of the Treasury, previously President of the Federal Reserve Bank of New York.1/3/2009

Sunday, February 17, 2008

Is Spring Wheat at the top of the market ?

The Market closed up 82 on Friday at MGEX. Kansas and Chicago are still operating at 60 cent daily limits whilst MGEX is using US$1.35 (which declines by 50% after 2 days).

Evidently demand is being affected by price ... but Iraq and Egypt have entered large contracts.

If these sort of levels maintain .. and crop conditions in the Southern Hemisphere suggests they will, it is early to make any judgements for the Northern Hemisphere.

It is difficult to see any reason why prices should not be sustained, short a massive global recession. Therefore in the next 12 - 24 months we can expect to see prices of grain related products, bread, pastas, flours up 15% to 20% and protein based on grain , poutry, pig, cattle rising higher.

Corn will be boosted by non food markets for fuel and we can expect US$5 a bushel plus for the next 2 seasons.

UPDATE Financial Times Monday

William Lapp, president of Advanced Economic Solutions, a Nebraska-based food consultancy, said the price surge was not a temporary hump but rather a structural change.
“We are not facing a short-term price blip...but a sustained move to a new and higher plateau for prices,” he added.

The American Bakers Association stopped short of asking for an export moratorium but pressed for curbs on foreign sales. Lee Sanders, ABA vice-president for government relations, said there was usually a surplus in the US wheat market equivalent to three months of US consumption.
“It is currently at a very low one-month level, which is extremely concerning,” she said.
Cereals traders said it was unlikely Washington would support export curtailments, but added that the call highlighted the tightness of the market.

CNN 60 year low of US wheat stocks Video "A Load of Crop" how ethanol subsidy for corn growers is distorting markets byreducing wheat acreage.

And by the Way ...

Platinum, soared to $2,030.60 at the New York Mercantile exchange, its 11th record high in 12 days. April futures, settled up $22.20 at $2,005.90 an ounce on the back of news on Wednesday that a power crisis in top producer South Africa that has curtailed mine production could persist for years.

Spot platinum hit a record of $2,205 an ounce and closed at $1,997.00/7.00 in New York.

April gold at the COMEX division of the NYMEX rose 60 cents to $910.80 an ounce. Spot gold closed in New York at $907.10/90, up from $906.70/7.50 on Wednesday.

In electronic ICE Futures, the U.S. May cocoa contract was up $57 at $2,545 a tonne in late trade, having peaked at $2,560, a level last seen in June 1984.

lUXOR 4 u FORUM .."We are currently experiencing in Luxor a flour shortage, and it is being rationed. Many people do not realise this, but supplies from America have been delayed. "

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