Read the last couple lines. Cottonpicken may have been right ( god help us all lol)
Grain prices in 'uncharted waters', says marketing expert
Wednesday, 12 September 2007
Independent WA grain marketing expert, Mark Martin, says the current record spike in world grain prices has no precedent.
Mr Martin, a director of commodity marketing advice firm MarketAg, said it was difficult to speculate on how far the latest price rally would go, as it had no parallels.
“We are at all-time highs and hence are in uncharted waters,” Mr Martin said.
“Previous rallies have been initiated by fundamentals such as declining wheat stocks owing to production problems.
"But they have often been pushed that bit further by specs or funds in the futures markets.”
Mr Martin said the big difference with this latest record price spike was that the rally was being fuelled by a change in the fundamentals.
Grain consumers concerned more about wheat supply security than about wheat pricing are propelling the white-hot streak.
“Europe remains somewhat insulated from world trade, as they are relatively self sufficient with their supply and demand,” he said.
“This year, their wet harvest has changed the balance and they need to import their shortfall.
“The vagaries of its GM-free grains policy limits its full buying ability - although this policy does not really apply to wheat, it does to feed grains.
“This has distorted prices and placed extreme upward pressure on the market.”
Mr Martin said the French and English wheat futures had become a guide as to where escalating prices may go.
“Lately, French wheat futures have been trading at US1,050c/bu, while Chicago Board of Trade (CBOT) has been trading at US840c/bu,” he said.
“One may postulate that CBOT could follow the French, if not the full distance, part of the way.
"So CBOT could hit US1,000c/bu, or $A500/metric ton.
“With growing expectation that Northern Hemisphere wheat planting for 2008 will increase significantly and seriously steal canola acres, a much smaller 2008 canola crop can only suggest one thing — much higher canols prices, but even more so for 2008 than 2007.”
Grain prices in 'uncharted waters', says marketing expert
Wednesday, 12 September 2007
Independent WA grain marketing expert, Mark Martin, says the current record spike in world grain prices has no precedent.
Mr Martin, a director of commodity marketing advice firm MarketAg, said it was difficult to speculate on how far the latest price rally would go, as it had no parallels.
“We are at all-time highs and hence are in uncharted waters,” Mr Martin said.
“Previous rallies have been initiated by fundamentals such as declining wheat stocks owing to production problems.
"But they have often been pushed that bit further by specs or funds in the futures markets.”
Mr Martin said the big difference with this latest record price spike was that the rally was being fuelled by a change in the fundamentals.
Grain consumers concerned more about wheat supply security than about wheat pricing are propelling the white-hot streak.
“Europe remains somewhat insulated from world trade, as they are relatively self sufficient with their supply and demand,” he said.
“This year, their wet harvest has changed the balance and they need to import their shortfall.
“The vagaries of its GM-free grains policy limits its full buying ability - although this policy does not really apply to wheat, it does to feed grains.
“This has distorted prices and placed extreme upward pressure on the market.”
Mr Martin said the French and English wheat futures had become a guide as to where escalating prices may go.
“Lately, French wheat futures have been trading at US1,050c/bu, while Chicago Board of Trade (CBOT) has been trading at US840c/bu,” he said.
“One may postulate that CBOT could follow the French, if not the full distance, part of the way.
"So CBOT could hit US1,000c/bu, or $A500/metric ton.
“With growing expectation that Northern Hemisphere wheat planting for 2008 will increase significantly and seriously steal canola acres, a much smaller 2008 canola crop can only suggest one thing — much higher canols prices, but even more so for 2008 than 2007.”
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