Does Anybody Care That Wheat Surpassed $10 A Bushel?

USAToday reports that the price of wheat just passed ten dollars a bushel. Those Midwest radio announcers who tack on the spot prices for six or eight agricultural commodities at the end of each 30-minute news break will probably be just a little less reserved today.

[Listening to the radio for hours and hours and hours while driving cross-country, as we did a few months back, provides all kinds of insight into what life is like in the vast U.S. interior.]

But aside from the Midwest, where the developing recession probably feels far, far away for many of those who are now getting ready for spring planting, does anybody know or care?

Does anybody know or care that the cost of food around the world seems to be spiraling out of control?

On Monday's post, Sooyoung left the following comment:

Greetings from Singapore, where virtually all of the food (and fuel) is imported. Just yesterday the prime minister, Lee Hsien Loong, urged fellow citizens to buy generic brands as a way to stave off inflation. As an American, I tried for a moment to imagine George Bush making such a desperate plea on TV and, well, I couldn't. The rising cost of food is probably the single biggest news item of the week here on the eve of the Lunar New Year. No wonder really, since housing is subsidized and no one drives thanks to a 100% tariff on cars.

Governments, central banks, and their gaggle of crack (smoking?) economists all around the world appear to be making quite a mess of things.

Comments

[flow5:]

Yes, I buy groceries along side a billion new illegal immigrants.

2008 Feb 07 12:17 PM

[sbenard:]

I care! I'm a grains trader! Soybeans, wheat, and corn all high all-time new highs yesterday. Fortunately, prices have backed off since then.

We had better get used to higher food prices. They're probably going to continue to go much higher, unfortunately.

Wake up, Fed. Sounds like Plosser and Lacker are starting to get it, but not Helicopter Ben!

2008 Feb 07 02:21 PM

[User 142738:]

As long as the U.S. manages the wheat/corn/cotton/etc. markets like Saudi Arabia manages the oil market, be prepared for higher prices. Outside of the NAFTA area, of course.

2008 Feb 07 04:58 PM

[Tradewolf:]

Of course we notice here in the vast midwest. It is a very good thing for the US. Wheat and corn are the new oil. The US is the new Saudi Arabia in this area. If people want the wheat then send the dollars(and oil). It works BOTH WAYS. To some, food will be worth MORE than oil SOON. Is it inflationary, yes. Collateral damage. If you ran a farm and watched all the rats from Wall Street running ADM taking over all your neighbors farms as the go under, you would be glad to see that farmers finally have some hope of a fair living. It will be a net BIG PLUS for the US and Canada to control the vast grain supply.

2008 Feb 08 08:20 AM

[haydete:]

As an investment information site, doesn't this article simple lead to buying DBA or JJG?

2008 Feb 08 10:11 AM

[Greg Pinelli:]

So Tom..what is your point? What's the investment take...?
A few simple reminders might be useful..Wheat (and virtually all other ag commodities) are not even close to their inflation adjusted highs (typically those occurred in the 1970's). Corn and wheat are not the new oil..a ridiculous concept. Corn will be seen for the fuel imposter it is soon enough and whet isn't used as a biofuel..though acerage certainly is lost to corn planting..as for food costs around the world...
What makes us responsible? Many of these countries have no problem charging us the going rate on their valuable products...turn around is fair play. Perhaps you san package some of that sappy sensitivity and send it to the poor and downtrodden of Singapore (!!??) and they can chew on it..instead of hard earned American foodstuffs.

2008 Feb 08 10:48 AM

[ballsschweaty:]

At $10.00 per bushel, the average loaf of bread contains about a dime's worth of wheat.

Wheat prices could double and a loaf of bread would increase by 10 cents. Big deal.

Argentina and Australia are about to produce record wheat harvests due to very favorable weather conditions.

I look for the price of wheat to crash this year to about $4.50 per bushel.

Enjoy!

2008 Feb 08 11:38 AM

[john haskell:]

come again on the "very favorable weather conditions" in Australia? Very favorable for the formation of dust bowls? What about the favorable conditions in China- for freezing their winter wheat crop, that is.

As you point out, the cost of wheat is a small portion of the cost of food products so don't look for any demand response to higher prices. Maybe we can persuade the Chinese to all go back to eating domestically produced rice so that prices will go down in the US.

2008 Feb 08 06:01 PM

[sbenard:]

The front month wheat contract closed yesterday at $10.93. The Chicago Board has a limit of 30 cents per day that it can go up. It has hit that limit 4 days in a row!

2008 Feb 09 05:18 PM

[sbenard:]

One last note -- wheat hit its lock limit price just 2 minutes after trading began Thursday evening, and remained at the lock limit price until close on Friday.

2008 Feb 09 05:19 PM

[bill bishop:]

so how does an individual investor make a concentrated play in wheat? i am not interested in corn or soybeans and have other commodity exposure. so far all the funds i have found seem to have a low weighting to wheat

2008 Feb 09 08:50 PM