Friday, January 28, 2011

U.S. Commodities: Grains Rise as Food Protests in Africa Mount

We are seeing a lot of articles written about the shortages of commodities which has happened all of a sudden. There are think tanks that have been created to show that the world is heading to a food shortage. Why? So that as farm land prices rise because hedge funds are buying the land they will then lobby US govt to provide subsidy's to provide the funds so they can exit with hefty profits.

Thanks Tim for the article Aivars Lode

U.S. Commodities: Grains Rise as Food Protests in Africa Mount
By Jeff Wilson and Whitney McFerron - Jan 26, 2011 6:15 PM ET

Wheat rose, capping the longest rally since November 2009, while corn and soybeans climbed as countries increase purchases from the U.S., the world’s biggest exporter, to cut food inflation and quell civil unrest.

Food-exporting countries are “strongly advised” not to restrict shipments to prevent “more uncertainty and disruption” in world markets, the United Nations said. Governments in Egypt, Algeria, Morocco and Yemen have faced protests amid rising costs and high unemployment, and a revolt toppled Tunisia’s leader.

“Sovereign nations are beginning to stockpile food to prevent unrest, and that will help to boost demand for U.S. grains,” said Jim Gerlach, the president of A/C Trading Inc. in Fowler, Indiana. “You artificially stimulate much higher demand when nations start to increase stockpiles.”

In other markets, hog futures surged to the highest in more than 14 years as prospects improved for U.S. pork exports to Asia. Sugar jumped more than 4 percent. The UBS Bloomberg Constant Maturity Commodity Index advanced 1.7 percent, the most this month, to 1,661.31.

Wheat futures for March delivery rose 18.25 cents, or 2.2 percent, to $8.565 a bushel on the Chicago Board of Trade, capping a seven-day advance of 11 percent. Earlier, the price reached $8.6125, the highest for a most-active contract since Aug. 6. The grain has jumped 73 percent in the past 12 months.

Corn futures for March delivery climbed 13.75 cents, or 2.1 percent, to $6.5775 a bushel. The price has surged 82 percent in the past 12 months.

Soybean futures for March delivery advanced 11 cents, or 0.8 percent, to $13.855 a bushel. The oilseed has gained 46 percent in the past year.


Hog futures for April settlement rose the exchange limit of 3 cents, or 3.4 percent, to 90.125 cents a pound on the Chicago Mercantile Exchange, the highest since May 1996. The price has advanced 31 percent in the past year.

South Korea’s Ministry of Strategy and Finance said yesterday that import tariffs will be removed on frozen pork through June to help stabilize local prices. The nation is culling livestock to combat its worst outbreak of foot-and-mouth disease. Wholesale pork, a gauge of demand, yesterday rose to the highest since Oct. 4, government data show.

“We had the news out of South Korea that was more friendly,” said Christian Mayer, a market adviser at Northstar Commodity Investments Co. in Minneapolis. “That should bring some more demand to the U.S.”


Sugar futures jumped the most in two weeks on signs that rising demand in Russia, the world’s largest importer, will compound a global production deficit.

Russia may reduce its import tax on raw sugar in March, two months earlier than planned, a unit of the Economy Ministry said. A proposal by the government in India, the world’s second- biggest producer, to allow exports of 500,000 metric tons was put on review this month amid rising food-price inflation. Sugar futures have doubled since the end of June.

“The market is being helped by expectations that demand from Russia will rise,” said Michael McDougall, a senior vice president at Newedge USA in New York. “Also, there is no news from India as yet.”

Raw sugar for March delivery rose 1.29 cents, or 4.1 percent, to settle at 33.13 cents a pound on ICE Futures U.S. in New York, the biggest gain for a most-active contract since Jan. 7. On Dec. 29, the commodity reached 34.77 cents, the highest since November 1980.

Commodities settled as follows:

Precious metals: April gold up 70 cents to $1,334.50 an ounce March silver up 32.3 cents to $27.128 an ounce April platinum up $9.60 to $1,796.90 an ounce March palladium up $19.85 to $804.60 an ounce

Livestock: April live cattle up 1.125 cents to $1.12275 a pound March feeder cattle up 1 cent to $1.26125 a pound April lean hogs up 3 cents to 90.125 cents a pound February pork bellies up 1.5 cents to $1.08 a pound

Grains: March soybeans up 11 cents to $13.855 a bushel March corn up 13.75 cents to $6.5775 a bushel March wheat up 18.25 cents to $8.565 a bushel March oats up 7 cents to $3.88 a bushel

Food and Fiber: March coffee up 6.25 cents to $2.375 a pound March cocoa up $17 to $3,352 a metric ton March cotton up 5 cents to $1.6683 a pound March sugar up 1.29 cents to 33.13 cents a pound March orange juice down 3.5 cents to $1.6715 a pound

Energy: March crude oil up $1.14 to $87.33 a barrel February natural gas up 1.8 cents to $4.491 per million British thermal units February heating oil up 7.69 cents to $2.6698 a gallon February gasoline up 8.79 cents to $2.4306 a gallon

Others: March copper up 4.1 cents to $4.267 a pound March lumber down $3 to $308 per 1,000 board feet

To contact the reporter on this story: Jeff Wilson in Chicago at; Whitney McFerron in Chicago at

To contact the editor responsible for this story: Steve Stroth at

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