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Wheat Futures At 29 Month High As Developing Country Demand Surges In Aftermath Of Tunisia Revolution

Tyler Durden's picture




 

Dow Jones reports that wheat futures just hit a 29-month highs on "strong global demand." Per the newswire, Algeria bought 800,000 tons of milling wheat, with traders estimating the nation's purchases for January at about 1.8M. Turkey and Jordan bought wheat last week after rising food prices helped fuel unrest in Tunisia. "They're saying, 'Boy we've got to eat. We don't know where wheat is going to be in a month,' says PFG Best. CBOT March wheat ends up 18 1/4c at $8.56 1/2 a bushel, while KCBT March climbs 22 1/2c to $9.40 and MGE March jumps 21c to $9.77. The chart below shows the UBS Bloomberg constant maturity Wheat index which confirms the vicious loop of what surging prices and geopolitical instability means to wheat prices. The higher the prices, the greater the scramble by developing (and soon developed) countries to acquire as much wheat as possible and hoard it, hoping to avoid Tunisia's fate, which of course will lead to even greater price surges. And all of this ignores the impact of the Goblin in Chief, whose money printing fetish has earned him, in our books, the adjective 'genocidal'. Once China figures out what is going on, and rice prices finally explode as we fully expect they will, the world will figure out just why...The only silver lining - soon farming will be the most profitable profession in the world. And as bankers only go where the money is, Bernanke's strategy may in fact lead to the first net natural outflow of bankers from Wall Street in history.

 

 

 

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Wed, 01/26/2011 - 16:44 | 907154 johnnymustardseed
johnnymustardseed's picture

Food prices, not oil prices will kill the dollar as the reserve currency

Wed, 01/26/2011 - 18:05 | 907459 CPL
CPL's picture

yup...god I'm going to make a fortune this summer even with a 30% crop failure rate.

 

All I can say is having productive land is grand.

 

People in general better start to take a page from the Mormon on food storage at this rate.  The hedge is going to be making sure you have 200 pounds of flour stored along with 800 pounds of beans.  Plus have a garden and some type of meat source.  I have rabbits and chickens.

Some easy guides on raising them.

cru.cahe.wsu.edu/CEPublications/eb0975/eb0975.pdf

www.ksre.ksu.edu/library/lvstk2/c547.pdf

 

Mostly it's building a hutch and feeding them.  To build a hutch.  This plan will set someone back around a weekend and $100 in materials.

www.abe.psu.edu/extension/ip/IP729-31.pdf

 

I would suggest anyone raising chickens to NOT if you don't like strong smells.  Chickens are stinky and they are dumb as a bag of rocks.

 

Wed, 01/26/2011 - 18:23 | 907527 Calmyourself
Calmyourself's picture

Ahh no, not unless you don't clean the coop,  A household flock of 15-20 chickens will give you plenty to eat and some to gift.  At 5.5 lbs a chicken White Leghorn you have 110 lbs of chickens, approximately two dogs in weight equivalent.  Clean the coop compost it once a month just shovel it out, no one will ever know you have chickens..  Cats can be smelly too but you can tell if the owner is worth a shit or not if you can smell them in a house.

Wed, 01/26/2011 - 18:49 | 907609 CPL
CPL's picture

True enough.  Rabbits though breed like rabbits.

Wed, 01/26/2011 - 19:35 | 907698 andybev01
andybev01's picture

Speaking of a bag of rocks; plenty of deer up here if you know how to hunt and the big bonus, you don't have to feed the little monsters.

Wed, 01/26/2011 - 19:53 | 907742 CPL
CPL's picture

Lots of wild turkey's around the Ottawa Valley as well.

 

Although I could see a lot of morons hunting and fishing for their first time and getting hurt.  Even experienced hunters are constantly on guard on avoiding getting clipped during hunting season.

 

Now take some guy out of the suburb, give him a 22 rifle, two hours of shooting practice and stick him in ten square miles with 4000 other suburban hunters also with the exact same ability.  All of them with the mindset that the woods are a grocery store and the fastest one to the check out wins.  I think I'll wait for off season and do a bit of blind hunting.

Let the stupid ones finished themselves off by hunting accident.  Going to have to figure out how to keep idiots off the property.  I would put the dogs out, but some twit might shoot it and eat it.

Wed, 01/26/2011 - 16:44 | 907157 DavidC
DavidC's picture

No Tyler, that can't be correct - there is no inflation.

DavidC

Wed, 01/26/2011 - 16:46 | 907162 Salinger
Salinger's picture

more video via bloomterd

Margaret Brennan shared this with viewers earlier today as her little dog had an encounter in a lux pet store in NYC

http://bit.ly/hHXKUw

Wed, 01/26/2011 - 16:47 | 907167 Cdad
Cdad's picture

Sweet!  I love trading Starvation.  I think I may be becoming a criminal syndicate Wall Street banker.  Hmmmm?

And as bankers only go where the money is, Bernanke's strategy may in fact lead to the first net natural outflow of bankers from Wall Street in history.

LOL!  But I was hoping would could have an banker outflow based on fire hoses.

Wed, 01/26/2011 - 16:53 | 907191 Logans_Run
Logans_Run's picture

...or indictments

Wed, 01/26/2011 - 17:35 | 907346 Cdad
Cdad's picture

Indictments would be nice...but that would require Rule of Law.  Currently, criminal syndicate Wall Street bankers live outside of the law.

I'm sure L. Blankfein and J. Dimon will suggest to M. Shapiro [as she meets with them relentlessly on the ways in which the markets can be made better]...I'm sure they will suggest to her that laws are not necessary, and criminal syndicate Wall Street bankers will do the right thing because it feels good.

Anyone hear if those meetings are close to wrapping up?  Anyone get the new updated explanation of Flash Crash? 

Mary?  Hello?

 

Wed, 01/26/2011 - 19:39 | 907706 SheepDog-One
SheepDog-One's picture

Im thinking 'nooses'.

Wed, 01/26/2011 - 18:10 | 907477 hambone
hambone's picture

Cdad,

+1 Sweet!  I love trading Starvation.

Many on ZH are no better than the elite they despise.  They are simply jealous and want the same for themselves.  No morals, no care for justice, nor for the future. 

In a game that is sucking the life from the world, trying to hit the next trade on Apple or whatever the fuck...people are willfully not seeing what is happening.  Step away from the casino tables and realize we are on a prison ship that will never be able to free itself from it's debt crimes...all your paper, your PM's will do you no good as the rule of law becomes only the suggestion of law or hint of law. 

Wed, 01/26/2011 - 18:40 | 907581 tmosley
tmosley's picture

You misunderstand those ZH posters then.  It's not about fucking everyone else and getting yours, it's about preserving capital so that we can rebuild after the destroyers have past away.  Most here would not emulate government manipulation of markets and their theft if given a chance (I hope).

Wed, 01/26/2011 - 19:11 | 907641 hambone
hambone's picture

TM,

I know you, many others, and ZH itself are of similiar mindset as to your stated philosophy...but I'm also very aware of what I feel is a growing element, based on postings, that are only looking to turn the fucking on the next guy.  I felt the need to call out these POS's who truly are looking to make their money on someone elses starvation, privation, or death (Cdad, sorry to jump on your post as I know this was said in sarcasm). 

I'm just saying look at our hands and check if they are getting bloody as we trade in this criminal activity called the "market".

Wed, 01/26/2011 - 18:12 | 907484 cossack55
cossack55's picture

Pipe dream.  Bankers doing physical labor. LMFAO!  Though, talking to cucumbers would closely resemble talking to regulators. 

Wed, 01/26/2011 - 16:50 | 907170 99er
Wed, 01/26/2011 - 16:49 | 907172 Yen Cross
Yen Cross's picture

Can I please get A Bltic DRY update? XLF? Vix on SPX and DOW. 20 hummm. Yes look out for 20.

Wed, 01/26/2011 - 16:59 | 907212 DoChenRollingBearing
DoChenRollingBearing's picture

stockcharts.com just had the $BDI (their ticker for Baltic Dry Index) at a lowly $1292.  That is ugly!

(Paper food ETF) DBA at $33.92, up kind of big today.

Disclosure: small holder of DBA

Wed, 01/26/2011 - 17:19 | 907281 101 years and c...
101 years and counting's picture

1,292 was yesterday.

BDI today was 1,234.

 

Wed, 01/26/2011 - 18:31 | 907552 DoChenRollingBearing
DoChenRollingBearing's picture

Ugh!  Even worse...

Yes, some of stockcharts.com's info is from the previous day during trading hours, $GOLD is an example I have seen as well.

Wed, 01/26/2011 - 16:50 | 907178 mynhair
mynhair's picture

Sell grains, buy ES!  Only 5 mins left.

Wed, 01/26/2011 - 16:51 | 907180 Internet Tough Guy
Internet Tough Guy's picture

Pizza dough is rising, bitchez.

Wed, 01/26/2011 - 16:55 | 907198 wisefool
wisefool's picture

pizza was invented in the Americas. As were tomatoes for the sauce.

Wed, 01/26/2011 - 18:02 | 907451 CrockettAlmanac.com
CrockettAlmanac.com's picture

As was the ciggie for after.

Wed, 01/26/2011 - 18:06 | 907467 Hephasteus
Hephasteus's picture

Tomatoes are a nightshade vegetable. They are poisonous they need line breeding to be edible. All tomatoes in america were poisonous until replaced by beneficially poisonous varieties.

Wed, 01/26/2011 - 18:08 | 907472 CPL
CPL's picture

Screw pizza dough...beer is rising!!

 

Should have kept the brew tanks I bought last year.  Oh well.

Wed, 01/26/2011 - 18:32 | 907557 DoChenRollingBearing
DoChenRollingBearing's picture

Beer prices up?  Now THAT is bad news.

RIOT!

Wed, 01/26/2011 - 16:52 | 907184 Yen Cross
Yen Cross's picture

Oh and the bond market. T as in 1-30. The b/c ratio is intact. look@ who the indirect bidders are. Yes off topic I know.

Wed, 01/26/2011 - 16:54 | 907192 nevadan
nevadan's picture

"soon farming will be the most profitable profession in the world. And as bankers only go where the money is, Bernanke's strategy may in fact lead to the first net natural outflow of bankers from Wall Street in history."

Unlikely since farming would require their lily white palms to be greased with the actual instead of cash.

Wed, 01/26/2011 - 16:56 | 907201 Jason T
Jason T's picture

The devil is doing his work.. you know, the deal gov't's made to pay people not to work, pay them not to grow their own food from that magical money tree he gave congress.

Wed, 01/26/2011 - 16:56 | 907203 Yen Cross
Yen Cross's picture

I forgot I'm west coast. Before you get flooded Tyler. NICE WORK!!!!!!!!!!!!!!!!!!!!!

Wed, 01/26/2011 - 16:59 | 907211 bob_dabolina
bob_dabolina's picture

HarryWanger says this is good because the S&P is up .76% and every meaningful commodity is up 2 -4%

So although cost of basic needs are doubling and quadroupling at least the stock market is up and this translates into an extra soap dish sold.

Wed, 01/26/2011 - 17:17 | 907271 DonnieD
DonnieD's picture

Gold took off like a raped ape.

Wed, 01/26/2011 - 17:52 | 907418 Hephasteus
Hephasteus's picture

Nope normal buying and selling. Somebody bought something expensive but not too expensive.

Wed, 01/26/2011 - 19:05 | 907630 Pants McPants
Pants McPants's picture

LULZ. 

Wed, 01/26/2011 - 17:01 | 907224 moldygoat
moldygoat's picture

This is a great link between the globalists push for economic collapse and population reduction. Never really thought of hyper-inflating people to death.

America is safe....no wheat in Wonder Bread!

Wed, 01/26/2011 - 17:02 | 907227 faustian bargain
faustian bargain's picture

Dow chart since 1960, current-vs-constant dollar comparison, from Shadowstats:

http://www.shadowstats.com/imgs/2009/520/hyperinflation-20.gif

Wed, 01/26/2011 - 17:03 | 907232 NOTW777
NOTW777's picture

while people in 3rd world countries riot for food cnbc upset dow lost 12k

Wed, 01/26/2011 - 17:10 | 907249 Lord Koos
Lord Koos's picture

" farming will be the most profitable profession in the world"

That'll be the day...

Wed, 01/26/2011 - 17:18 | 907276 nevadan
nevadan's picture

lol.  I suspect from your comment that you also have some farming in your background.

Wed, 01/26/2011 - 17:37 | 907353 Sean7k
Sean7k's picture

More farm grain silos and grain held for sale during the year to increase profits for the farmers. Storage will be the new bank.

Wed, 01/26/2011 - 17:37 | 907363 Mad Max
Mad Max's picture

Because storage is free, and none of those farmers have any debt that comes due right at harvest time...

Wed, 01/26/2011 - 17:50 | 907408 Sean7k
Sean7k's picture

You sell enough to cover your costs at harvest and save the rest to release at better price points. Once you invest in the storage- you have better options than the coops where they are reluctant to give set contracts. Farming is a changin'.

Wed, 01/26/2011 - 19:35 | 907699 MachoMan
MachoMan's picture

Bingo.  Storage costs aren't shit compared to the price appreciation we're seeing...  plus, with geothermal and other technologies, I'm guessing the electricity costs, even for rural storage, can be substantially mitigated, albeit costly on the front end.  If you can't pay for it, go in with a few neighbors...

Wed, 01/26/2011 - 22:08 | 908200 Mad Max
Mad Max's picture

Storage costs aren't shit compared to the price appreciation we're seeing...  plus, with geothermal and other technologies, I'm guessing the electricity costs, even for rural storage, can be substantially mitigated, albeit costly on the front end.  If you can't pay for it, go in with a few neighbors

Wow, is it ignoramus night on ZH?  Where do I begin?

Let's see:

The real farmers I know, who live down the road and sometimes cut, rake and bale my hayfields, seem to think that storage costs are significant.  That may explain why they don't store much at their farms, except very briefly in the gravity wagons.

How exactly do you think electricity costs matter for storage?  The grain disappears if you don't keep it electrified?!?!?!

Oh my god: "with geothermal and other technologies, I'm guessing the electricity costs" for starters geothermal is not a useful way to generate electricit unless you have a volcano.  It's used for electric in Iceland and a few other places where Vulcan lives.  Totally useless for generating electricity in 99% of the US.  My house has a geothermal heating system, which IS an efficient way of heating a house, but does not nor can it generate electricity, and doesn't even generate heat in a way that would be useful for drying grain (a major, MAJOR expense for many farmers; and propane is what 99% of them use for grain drying).

"Go in with a few neighbors" - have you ever met a farmer?  Or even seen one?  This is not how farmers operate in the US.  It's a difficult business, with a lot of expensive equipment that sits idle for 48-50 weeks and gets used nonstop for 2-4 weeks of the year.  Anything that can realistically be shared already is.

But, don't let me stop you, please go on and explain why cold fusion will be replacing gas stations by Q4, and I'll by flying my battery-electric antigravity car to work by 2013.

Wed, 01/26/2011 - 23:25 | 908375 nevadan
nevadan's picture

Actually storage isn't all that much.  The current rates in Colorado where my family raises wheat is .03-.04/bu/mo.  So a year storage for 1000 bu. or $8000 worth of grain presently is <$500. There is a rate hike in the near future 50-100% though.  The elevators aren't going to miss out on the bull market in grains.

Thu, 01/27/2011 - 15:10 | 910104 MachoMan
MachoMan's picture

First, I hate to break it to you, but hay is for horses and, in the scope of american agriculture, amounts to jack shit...  it has literally nothing to do with what we're talking about.  [e.g. price per volume, degree of market volatility, rate of decay, etc., all lead to different analyses].

Second, how does it add to the discussion to reform other posters' statements into nonsensicle blather?  Clearly, no one is advocating for the electrification of grain...  rather, electricity is one of the main variable costs in drying grain...  i.e. what you have to do to store grain on your own property.

Third, as for geothermal grain drying, here are a couple links from a simple google search:

http://www1.eere.energy.gov/geothermal/pdfs/directuse.pdf

http://www.faqs.org/patents/app/20100170105

http://www.gtpower.com.au/media/gtpower_brochure.pdf

Last, yes, you might say I am intimately acquainted with just a couple farmers...  however, this has nothing to do with farmers sharing things.  Obviously, markets are dynamic and when the market changes so as to provide technologies or an environment whereby shared grain storage is more efficient, it will be more widely adopted.  The fact of the matter is that a substantial amount of farmers choose not to mess with it and forgo a substantial sum to have someone else do all their drying, marketing, etc.  This is fine, but when you lock in your price early in the season and the price doubles by the end of the season, you've left a shit ton of money on the table...  and there are more than a few farmers that have been not so happy at these developments.  All I'm saying is that nothing stands in stone and market forces may not only facilitate, but necessitate change.

Wed, 01/26/2011 - 17:36 | 907354 Mad Max
Mad Max's picture

+1000

Buy at retail, sell at wholesale, and pay the freight both ways!

Wed, 01/26/2011 - 17:24 | 907300 sushi
sushi's picture

soon farming will be the most profitable profession in the world. And as bankers only go where the money is . . .

The bankers can relax and stay on Wall St. They do not need to leave. The pitchforks will come to them.

Wed, 01/26/2011 - 17:28 | 907325 topcallingtroll
topcallingtroll's picture

All these piss ant countries could stop the inflation now by floating their currencies. Its not the feds fault that these countries peg to favor the mercantilist and commodity export groups. Maybe they are too illiquid to float but unfair currency pegs starve the poor not the fed.

Wed, 01/26/2011 - 18:26 | 907536 erik
erik's picture

De-pegging from the US dollar could be opening Pandora's Box.  Nobody knows exactly what would happen. 

When these starving countries realize that it is the Fed's printing press that is causing all the food price inflation there will be some serious fireworks.

Two of the countries on the susceptible list are India & China.  That's half of the world population.

Wed, 01/26/2011 - 19:39 | 907707 MachoMan
MachoMan's picture

Ok, so they either starve because the prices of food increase vastly quicker than their wages or they starve because they no longer have any wages...  pick your poison.

I'll tell you who knows what will happen...  THE COUNTRIES THAT REFUSE TO DE-PEG...  it's not like they're all fucking retarded and we're the only ones with any insight...  it's just not that simple.

Wed, 01/26/2011 - 17:46 | 907396 buzzsaw99
buzzsaw99's picture

Farming is honest work.

Bankers steal.

Wed, 01/26/2011 - 17:49 | 907404 americanspirit
americanspirit's picture

Wheat is an important grain but not nearly as important as rice in terms of numbers of people who depend on it, and most of the wheat is consumed in the temperate zones of the world, not the tropical. While wheat is vulnerable to drought and heat, rice is vulnerable to monsoons, floods, typhoons, high winds, and a lot of other natural disasters. Neither China nor India nor Indonesia can grow enough rise to feed their own populations, much less export to smaller rice-dependent countries. Also rice production requires huge amounts of petroleum-based pesticides and other agrichemicals - wheat, not so much. Watch rice closely.

Wed, 01/26/2011 - 17:57 | 907438 Sudden Debt
Sudden Debt's picture

Hamstering is a killer for inventory.

People mostly take twice what they need.

BAD BAD BAD!!

 

Wed, 01/26/2011 - 18:01 | 907450 Yophat
Yophat's picture

Washington—Agriculture Secretary Tom Vilsack issued Jan. 25 the following statement on the reported sale of 2.74 million metric tons of U.S. soybeans to China in the 2011-12 marketing year:

Today’s sale of 2.74 million tons of U.S. soybeans to China is the single largest daily soybean sale since USDA began issuing daily sales reports in 1977.

"This is another strong sign that China continues to look to the United States as a reliable supplier of high-quality products.

"This is great news not just for American soybean farmers but for the U.S. economy overall.

"The U.S.-China trade relationship continues to flourish, thanks in large part to agriculture. U.S. farm exports to China have grown nearly tenfold over the past decade, from $1.5 billion in fiscal year 2000 to $15 billion in 2010.

http://www.grainnet.com/articles/USDA_Secretary_Vilsack_Statement_on_Rec...

Wed, 01/26/2011 - 18:05 | 907463 Sean7k
Sean7k's picture

Yeah, but 15 billion is only worth 1.5 billion in 2000 dollars. Snark.

Wed, 01/26/2011 - 18:21 | 907517 Pure Evil
Pure Evil's picture

It seems the idiots running this country seem to be able to find ever newer ways to give to the Chinese for pennies on the dollar everything America produces. From outsourcing American jobs, giving the PRC our military secrets, and now to just giving away agricultural products.

Job well done Brownie!

Wed, 01/26/2011 - 19:43 | 907717 andybev01
andybev01's picture

We could sell them Taco Bell 'beef' instead?

Wed, 01/26/2011 - 18:05 | 907462 sabra1
sabra1's picture

who needs fiber anyway!

Wed, 01/26/2011 - 18:28 | 907545 Math Man
Math Man's picture

Maybe I should listen to those wannabe hippies and go on a Gluten free diet.

Wed, 01/26/2011 - 18:41 | 907588 erik
erik's picture

stories like this one could stoke fear-driven buying by other countries believing that they will be "priced out".

very, very bad things are mere months away now.  Bernanke will be remembered in infamy.

Wed, 01/26/2011 - 19:02 | 907628 kote
kote's picture

S&P also at a 29 month high... had to pay for that somehow.

Wed, 01/26/2011 - 19:50 | 907732 medicalstudent
medicalstudent's picture

washingtonpost

"In the same vein, new school-lunch standards expected to be implemented by the 2012-13 academic year would require schools to serve only non-fat or low-fat milk."

 

what have we become?

 

soul rot.

 

 

Wed, 01/26/2011 - 20:03 | 907768 Johnny Dangereaux
Johnny Dangereaux's picture

Looking for a "headline" correction to fleece the come-latelys before the real rally...

Wed, 01/26/2011 - 20:41 | 907874 chump666
chump666's picture

ah the 2008 inflation spike on food, nice...then the crash. 

China will go nuclear on this i.e food inflation.

Obama should be shitting his panties

Wed, 01/26/2011 - 21:36 | 908100 Buck Johnson
Buck Johnson's picture

The funny thing is that it took at least 3 years for this to finally go from the smoke in the woods to the forest fire for inflation of food and commodities.  This cant be stopped quickly, because even if Obama or the western bankers came up with a fool proof plan it would take at minimum the 3 years to even show and I'm being conservative.  Think of this whole situation as the old fable from asia about the butterfly flapping its wings on this shore and on another shore it produces a hurricane.  It's called the Butterfly effect, it's a metaphor that encapsulates the concept of sensitive dependence on initial conditions in chaos theory.  It's almost impossible to control something like this once it gets out to a certain point, eventually it burns itself out.  But in the case of a planetary inflation spiral, it can take down alot of countries and economies with it.

Wed, 01/26/2011 - 22:13 | 908213 americanspirit
americanspirit's picture

Hey Math Man - I do hope that you are in the 75% OF THE POPULATiON WHO ARE NOT GLUTEN INTOLERANT BUT JUST IN CASE YOU'RE NOT ( OOPS SORRY FOR THE CAPS) you need to know that gluten triggers an immune response in the unfortunate 25% that can actually kill you. That isn't hippies talking - that's a guy who watched his wife dying slowly with no doctor able to help until we found the solution ourselves. Stop being so ignorant and just google these four keywords - gluten, thyroid, molecular, structure.

It's called Hashimoto's thyroiditis, and I hope that nobody you love ever has to go through what we have gone through for five years before we found the answer, you intolerant asshole.

Wed, 01/26/2011 - 22:39 | 908270 Trifecta Man
Trifecta Man's picture

MOO.

Wed, 01/26/2011 - 22:40 | 908272 ak_khanna
ak_khanna's picture

The only thing driving up commodity prices are speculators armed with cheap money and super fast computers. This is causing a havoc in the lives of rest of the population and pushing them towards poverty as they can no longer afford the basic necessities of life.

Regulators are too slow to react and take ages to identify and take measures to solve the problems.

Total ban on speculation is strictly required all over the world to bring relief to the man on the street.
http://www.marketoracle.co.uk/Article24581.html

Wed, 01/26/2011 - 23:55 | 908435 red2893
red2893's picture

Pizza was invented by the Nigerians:

 

http://theopeningrange.blogspot.com/2011/01/bored-to-death.html

Thu, 01/27/2011 - 04:09 | 908711 zedder
zedder's picture

Wasn't it in Omen III that Damien and his Thorn Corp traded in and cashed in on starvation? Who now is the nouvelle Damien?

Thu, 01/27/2011 - 04:38 | 908722 SAME AS IT EVER WAS
SAME AS IT EVER WAS's picture

Do NOT follow this link or you will be banned from the site!