Western Canada experienced frost last week, damaging the region's crops, including wheat, canola and barley. Similarly, parts of China also experienced freezing weather, threatening some grain crops there. Meanwhile, in Russia, the severe drought, which caused the country to ban wheat exports, is continuing. Russian farmers have planted 39% less winter grains this year, according to Bloomberg.
Monday's grain prices are continuing last week's rally. December corn futures are trading at $5.23 per bushel, up 10. cents (each 1 penny equals $50) as of 9:00 a.m. EDT. November soybeans are at $10.93 per bushel up 20 cents. Wheat is trading at $7.49 per bushel, up 10.4 cents.
Since some grains are used in cattle and hog feed, look for the prices of cattle and hogs to go higher. Pork bellies, which are used to make bacon, have already surged past $1.00 per pound on the futures markets. At retail, the prices are double that and more. Check you local supermarket the next time you buy bacon.
Another factor driving grain prices higher is fund buying. Hedge-fund managers have pushed net long positions to a record, Bloomberg reports. Net longs, which is the difference between longs and shorts, rose 6.2% to 401,684 contracts -- the highest since June 2006, the first year of data collection.
While not always on the front page, it is important to realize that corn is the biggest U.S. crop, valued at $46.8 billion. Soybeans are next valued at $31.8 billion. What happens to the grain markets will be reflected across a wide spectrum of products at the supermarket shelves in the coming months.
Reader Comments (Page 1 of 1)
9-20-2010 @ 1:57PM
hemipwr54 said...
Whoa , whoa , wait a minute , freezing is causing the shortage ! Hmm , sounds suspicious to me .
I mean the Gullible Warning and all , but yet freezes are killing crops .
So it is man made , man made to raise prices on commodities and food , not Gullible Warning just the rise in prices are man made !
9-20-2010 @ 2:02PM
hemipwr54 said...
The Rich and wasteful are killing us we have to STOP them , they are out of control , we can't sustain this much longer it is going to implode .
The poor are causing the slow recovery , yet the rich and wasteful keep raising prices , so who is to blame the poor or the greedy , my bet the greedy !
9-20-2010 @ 2:04PM
Bug said...
All this is, is propaganda aimed at justifying all the increase in prices heading our way just in time for school lunches and the holidays. Greedy Bastards...oops, that's more than greedy.
9-20-2010 @ 4:10PM
Trude said...
THERE GOES THE PRICE OF THE ONLY CEREAL I CAN AFFORD----CHEERIOS! SOON I'LL BE PAYING $10 A BOX!!!
9-20-2010 @ 9:25PM
NORMA C. said...
So what's new??? It is always that way any way to get your money what there is of it that is and that is not very much now days.
9-20-2010 @ 5:36PM
Azhot1 said...
By CPO, eat more oatmeal:-)
9-20-2010 @ 5:48PM
al schrader said...
I eat Tuna, Cobia steaks, shrimp, seafood, etc. None of it eats corn or grains and it's gluten free. Hey, have a piece of grilled Tilapia. Yum.....Al-
9-20-2010 @ 10:08PM
jre661 said...
The price of everything of any value went up to day because someone farted. Oh yeah , and another person belched real loud. Good night America!