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Peak wheat!!

by whataboutbob Thu Sep 6th, 2007 at 10:08:16 AM EST

Devilstower has a good article up over at Daily Kos   "Wheat feels the heat" worth checking out. I went and looked at the Dow Jones link and found this:

NEW YORK -(Dow Jones)- Wheat futures bolted to fresh record highs Tuesday and closed limit-up in many contracts amid fears that drought may slash Australian production for the second year in a row, analysts said.

Unexpectedly large purchases from India also boosted wheat prices, analysts said.
Nearby Chicago Board of Trade September wheat traded as much as 43 cents higher during the day session and set an all-time high of $8.10 a bushel. That exceeded the previous intraday high of $8.05 a bushel. The contract, exempt from the typical 30-cent trading limit because it is in delivery, closed up 40 cents at $8.07 a bushel.

Most-active CBOT December wheat closed limit-up, or 30 cents higher, at $8.05 1/2 a bushel.

Hmm...peak wheat! For many countries, this could be seriously bad news...


Devilstower starts with this:

In yesterday's commodity trading, wheat closed at record highs. Why is wheat shooting up? Because a hot, dry wind in Australia threatens to strip the last drop of moisture from fields that are already hurting for rain. At the same time, several other countries in the Southern Hemisphere have turned from wheat exporters, to wheat importers. But if today's trading was focused on problems in the south, that's not the only place where rains have been sporadic in the last couple of years. Wheat growing areas in many northern countries, including Eastern Europe and the United States, have faced unusually hot and dry weather.

Peak wheat...peak du jour...

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If this is a trend, then a lot of poor people who rely on wheat as a staple of their diet could be badly...including those poorer people in the US and other developed countries...

"Once in awhile we get shown the light, in the strangest of places, if we look at it right" - Hunter/Garcia
by whataboutbob on Thu Sep 6th, 2007 at 10:09:52 AM EST
AFP: Drought again threatens Australian wheat output: trade minister

SYDNEY (AFP) -- Drought could wipe out Australia's wheat crop despite expectations that the country's worst dry spell for a century was easing, Trade Minister Warren Truss warned Tuesday.

"In many parts of Australia there has been some relief and a quite large wheat crop was planted," he told reporters on the sidelines of an Asia-Pacific summit in Sydney.

"It's disappointing to hear reports now that the crop is deteriorating especially in New South Wales and parts of Victoria."

And in Western Australia:

Hot winds severely damage Australian wheat | World | Reuters

PERTH (Reuters) - Hot winds this week caused severe damage to the Western Australian wheat crop, further reducing the country's already struggling crop, Western Australia's Agriculture Minister said late on Tuesday.

In an interview with Reuters, Minister Kim Chance said bad weather was likely to wipe up to 2 million tonnes from the national wheat crop.

"The hot, windy day this week caused huge damage so we saw a number of crops written down on Monday on the basis of one day's wind in Western Australia," Chance said.

"Our total wheat crop could be about 1 or 2 million tonnes lower than the lowest end of the projections made so far," the state Minister of Agriculture and Food told Reuters.

Australia's wheat crop nationwide has been hit with extremely dry conditions throughout August, particularly in the past two weeks, analysts said on Wednesday.

This has reduced almost all forecasts of the wheat crop to less than 20 million tonnes, Ron Storey, head of private forecaster Australian Wheat Forecasters, said.

ACF this week reduced its forecast to 19.5 million tonnes and even this was at the upper end of the range of forecasts, he said.

Other trade forecasts were for a crop of 18 million tonnes or even less<...>

Australia's last wheat crop, for the year to March 2007, was decimated by drought, falling to 9.8 million tonnes from 25.4 million tonnes the year before.

So there seems to be some evidence Australia will not produce the usual amount (around 25 million tonnes) of wheat this year, with a shortfall of perhaps 7 m tonnes.

I'm not certain where we're at with this summer's crop from the northern hemisphere. In this exchange from Monday's Salon, Magnifico and asdf told us the US had a bumper crop. OTOH, this is the news from Canada, where drought has caused problems:

Brownfield Network: Stats Canada sees decline in wheat crop

The total Canadian wheat crop for 2007 is pegged at 20.322 million tons, as of July 31. That's down 19.6% from the 2006 figure of 25.265 million tons.

The EU's harvest is not all that good, and Russia has been talking about restricting exports because of a poor harvest.

All this comes on the back of a very bad 2006. So there would appear to be some objective reasons for high prices.

There's also speculation of two kinds: from market players, and from "hoarders". By the last I mean that grain merchants and farmers are hanging on to what stocks they have in hope of pulling in a bumper price.

by afew (afew(a in a circle)eurotrib_dot_com) on Thu Sep 6th, 2007 at 11:22:10 AM EST
that there are objective reasons, but I can't help but be suspicious of the percentage of agro-industrial PR included in the price increase.  When a subject becomes a sudden wave of news everywhere, I know part of it is BS and/or a distraction from other issues.

It has been a long 6 years... and I trust very little.

Our knowledge has surpassed our wisdom. -Charu Saxena.

by metavision on Thu Sep 6th, 2007 at 01:57:43 PM EST
[ Parent ]
I live on the northern edge of the corn belt.  I have lived around real farmers my whole life.  I consider as a good friend a farmer who got 240 bushels of corn per acre last year on his land.

This is not enough to make me an expert, but here's my report.

The agriculture system on planet earth is in BIG trouble.  Yes, yields have increased from around 35 to 225 bushels of corn per acre in my lifetime but these gains have come at horrific costs in soil erosion, depleted aquifers, the dead zone off Louisiana, etc.  The idea that there is another six-fold productivity increase using any imaginable methods is insane.

THEN there is the ruination of PRIME agricultural land for shitbox housing.  We are some of the most guilty people on earth around here.

THEN we have built only god knows how many oversized ethanol plants.  I recently heard a guy say that we have already committed the corn crops of Minnesota, Iowa, and Nebraska to running our cars.

Save your skepticism for subjects MUCH more likely to need it.


"Remember the I35W bridge--who needs terrorists when there are Republicans"

by techno (reply@elegant-technology.com) on Thu Sep 6th, 2007 at 03:17:36 PM EST
[ Parent ]
That rundown of major world producers shows there really are objective supply problems at a time of rising demand.

But I also said there are people, one way or another, playing the market. That may include banging the media drum.

by afew (afew(a in a circle)eurotrib_dot_com) on Thu Sep 6th, 2007 at 03:18:24 PM EST
[ Parent ]
Of course.  That is ALWAYS the case.  You have a real problem that is multiplied by the speculators.

Just keep in mind that there are REAL and VERY serious problems with agriculture.  NO ONE is faking those.  In fact, they will be ignored.  As long as the speculators make money, the turmoil in agriculture will not be considered a serious problem in our pig-ignorant media.

"Remember the I35W bridge--who needs terrorists when there are Republicans"

by techno (reply@elegant-technology.com) on Thu Sep 6th, 2007 at 03:36:25 PM EST
[ Parent ]
it just reminds me of the cree indian poster you see on loads of hippies walls

Only when the last tree has died and the last river been poisoned and the last fish been caught will we realise we cannot eat money.

~Cree Indian Proverb


Any idiot can face a crisis - it's day to day living that wears you out.

by ceebs (ceebs (at) eurotrib (dot) com) on Thu Sep 6th, 2007 at 03:43:46 PM EST
[ Parent ]
And let's not forget Peak Milk!

"Pretending that you already know the answer when you don't is not actually very helpful." ~Migeru.
by poemless on Thu Sep 6th, 2007 at 11:29:10 AM EST
You get that from Mountain goats?

Any idiot can face a crisis - it's day to day living that wears you out.
by ceebs (ceebs (at) eurotrib (dot) com) on Thu Sep 6th, 2007 at 12:01:48 PM EST
[ Parent ]
<<booing, throwing tomatoes...>>

"Pretending that you already know the answer when you don't is not actually very helpful." ~Migeru.
by poemless on Thu Sep 6th, 2007 at 01:31:37 PM EST
[ Parent ]
I hope they're organic young lady </look down nose over spectacles>

Any idiot can face a crisis - it's day to day living that wears you out.
by ceebs (ceebs (at) eurotrib (dot) com) on Thu Sep 6th, 2007 at 01:39:23 PM EST
[ Parent ]
RIA Novosti - Opinion & analysis - What the Russian papers say

Russia may limit grain exports this year

The Russian government is looking into the possibility of limiting exports of grain, primarily of wheat, as a way of curbing inflation, and could decide to do so as early as September 13.

Grain sales from state reserves should stop the rise in bread prices and the government included them in its package of anti-inflation measures.

Experts explain the steep surge in prices by poor harvests in Europe, Canada and Australia.

Apart from that, Ukrainian authorities imposed a restrictive duty on wheat exports in June, with Ukraine being the world's sixth-largest grain exporter.

Therefore, if Russia (which is the world's fifth-largest grain exporter), limits grain supplies, wheat prices may hit a new high.

"There is an opportunity to limit [grain] exports. A special working group has been set up by the Russian Agriculture Ministry to conduct consultations on these issues," said Arkady Zlochevsky, president of the Russian Grain Union.



The struggle of man against tyranny is the struggle of memory against forgetting.(Kundera)
by Elco B (elcob at scarlet dot be) on Thu Sep 6th, 2007 at 12:00:44 PM EST
An early sign of wheat ceasing to be a commodity. Looks like wheat might be going down this road faster than oil.

you are the media you consume.

by MillMan (millguy at gmail) on Thu Sep 6th, 2007 at 12:46:06 PM EST
[ Parent ]
Looks like we're well on our way to Peak Human.

(But that's what you get when a species decides that it doesn't believe in the limitations set by the physical world.)

by ThatBritGuy (thatbritguy (at) googlemail.com) on Thu Sep 6th, 2007 at 01:12:05 PM EST
Peak Milk.

Peak oil is not an energy crisis. It is a liquid fuel crisis.
by Starvid on Thu Sep 6th, 2007 at 04:10:02 PM EST
Thanks.  I think people thought I was kidding about that.  Peak milk is real, my friends.  Also a liquid fuel crisis.

"Pretending that you already know the answer when you don't is not actually very helpful." ~Migeru.
by poemless on Thu Sep 6th, 2007 at 04:17:22 PM EST
[ Parent ]
The price of bread is already up 25% since the beginning of the year in Portugal, and rising.
by Torres on Thu Sep 6th, 2007 at 05:25:30 PM EST
We've got a rising population, falling agriculture production, 35% of all agricultural land has been damaged or destroyed, the best farmland - in the US - is buried under concrete, soil erosion, soil depletion, increasing oil prices impacting food production all along the logistics chain, GW, PO, H20 scarcity, changing weather patterns, idiotic agriculture policies in the First World countries, and a daft political/economic system.

Gosh.  Think all that might cause a tiny whoopsie in the wheat market?

She believed in nothing; only her skepticism kept her from being an atheist. -- Jean-Paul Sartre

by ATinNM on Thu Sep 6th, 2007 at 07:42:12 PM EST
Industrial farming is an oxymoron.  It is not farming.  It's extraction.  Liquidation.  Stripmining.

In Iowa, the production of one bushel of corn may cause the loss of two bushels of topsoil.

That's Wendell Berry, some ten or so years ago.

The only reason chem/fossil farming seems to "work" and produce high yields is that it stripmines biotic resources.  Much as the only reason industrial capitalism seems to "work" and produce rapid growth is that it stripmines biotic resources.  Hornborg, Hornborg, Hornborg...

... and everyone goes on buying cheap air tickets.

The brick wall is close enough now that we can count the bricks.

The difference between theory and practise in practise ...

by DeAnander (de_at_daclarke_dot_org) on Thu Sep 6th, 2007 at 08:35:40 PM EST


You might find me At The Edge Of Time.
by Luis de Sousa (luis[dot]a[dot]de[dot]sousa[at]gmail[dot]com) on Fri Sep 7th, 2007 at 04:12:42 AM EST


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