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Wheat Trades Limit Up As Russia Halts Grain Exports Through Year End

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http://www.zerohedge.com/article/wheat-trades-limit-russia-halts-grain-exports-through-year-end

Wheat Trades Limit Up As Russia Halts Grain Exports Through Year End

By now readers have likely seen the satellite photos of smoke clouds over pretty much all of western Russia, as today Moscow once again bakes in record heat and the entire former USSR breadbasket is caught in a historic drought. Recent concerns about the Soviet wheat harvest have already caused wheat prices to surge, yet this morning's announcement from Putin that Russia will stop all grain exports starting August 15 and continuing through the end of the year just sent what limit up. FT reports: “I think it would be expedient to introduce a temporary ban on export grains and other agricultural goods,” Mr Putin told a cabinet meeting. “We cannot allow an increase in domestic prices and we need to maintain the number of cattle. Wheat prices rallied sharply on the news. In Chicago, wheat jumped by its daily limit of 60 cents to a new two-year peak above $7.85 a bushel, up almost 80 per cent in a little over a month. In Paris, European wheat hit €222.75 a tonne, up 6.6 per cent on the day." And it appears other commodities are set to follow: "Ïnterfax, the Russian news agency, earlier quoted a source in one of the economic ministries as saying that the export ban could affect wheat, barley, rye, corn and flour.”

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It IS a bad crop. Now on BBC website that they've just banned all grain exports from 15th Aug - 31st Dec:

http://www.bbc.co.uk/news/business-10879138

"Mr Putin's announcement sent wheat prices to a 23-month high."

Why give 10 days notice? For delivery of produce already traded I suppose.

Edited by deflation

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they've just banned all grain exports from 15th Aug - 31st Dec:

It's worth noting that export controls exacerbate supply-side failure...

... always have, always will.

On a more interesting note, we're rapidly heading for a six sigma event in soft commodities...

http://noir.bloomberg.com/apps/news?pid=newsarchive&sid=as3LR5GZ7UwA

http://noir.bloomberg.com/apps/news?pid=newsarchive&sid=aaJOWSHMJWis

http://news.smh.com.au/breaking-news-world/severe-damage-from-n-korea-floods-20100805-11kpk.html

... anyone keeping score?

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Guest Noodle

So we all know what it means.

A six sigma event is characterized by a price drop of six times the volatility (or standard deviations) of the asset, thus the name six-sigma, sigma being the Greek letter representing volatility.

Thank you Particles.

However, wheat harvest failure in Russia, possible rice harvest failure across this region east of the Bay of Bengal (getting some rain now so hopefully the third(!) planting will succeed) and of course the monsoon flooding west of the Bay of Bengal . . . now hitting the farming areas . . .

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So we all know what it means

Interesting definition.

Six times volatility, yes.

Drop? I doubt it.

See the links...

(nb, for anyone who's not a farmer's son - if the state attempts to establish a price ceiling well below the market clearing price, producers will simply pack up and quit; in this specific case, I expect the subsequent crop to be virtually non-existant, too)

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Crop's probably going to be shitty here in Canada too, so I'd expect some major food price inflation over the next year or two.

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It's worth noting that export controls exacerbate supply-side failure...

... always have, always will.

On a more interesting note, we're rapidly heading for a six sigma event in soft commodities...

http://noir.bloomberg.com/apps/news?pid=newsarchive&sid=as3LR5GZ7UwA

http://noir.bloomberg.com/apps/news?pid=newsarchive&sid=aaJOWSHMJWis

http://news.smh.com.au/breaking-news-world/severe-damage-from-n-korea-floods-20100805-11kpk.html

... anyone keeping score?

Farmers told to prepare for locust plague

Posted Mon Aug 2, 2010 4:19pm AEST

Federal Agriculture Minister Tony Burke says the worst locust plague in years is set to hit parts of Australia in the coming weeks.

http://www.abc.net.au/news/stories/2010/08/02/2971232.htm

Edited by mattyboy1973

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Can't stockpile bread, but definitely time to buy in lots of dry pasta!

But you can stockpile wheat, it has a shelf life of 25 years (only one year as flour, however)

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Quick - buy bread. I can recommend certain loaves ;)

On another story it was noted that wheat currently comprises only 10% of the price of a loaf of bread. So it could double and we wouldn't really notice it.

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Quick - buy bread. I can recommend certain loaves ;)

On another story it was noted that wheat currently comprises only 10% of the price of a loaf of bread. So it could double and we wouldn't really notice it.

It did not stop them rising the price of an average loaf from 40-60p to 80-100p the last time we had a quick rise (then collapse) of wheat prices.

An people think there is no scope for deflation in food prices ;)

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On another story it was noted that wheat currently comprises only 10% of the price of a loaf of bread. So it could double and we wouldn't really notice it.

80% of the price of a loaf of bread is made up of the bakers rent or mortgage. *

* Made up statistic.

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Guest Noodle

not made up stat

price of wheat up 86% since June

good for growers

bad for deflationits

What's all this about locusts in Aus?

We have regular rains now so the rice should be okay.

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