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Wheat prices pushed above $10 per bushel Monday, as dry weather threatened crops in Argentina, adding to concerns regarding a potential wheat shortage, Bloomberg News reported Monday.The bullish move in wheat sent other grains and oilseeds higher. Argentina, now experiencing summer, is a key supply of wheat for bread, pasta and livestock feed.
The price of wheat has more than doubled in the past year, with wheat climbing another 30 cents to $10.03 per bushel Monday morning. Soybeans gained 17 cents to $11.93 per bushel. Corn rose 5 cents to $4.43 per bushel.
Global growth
Economist Steve Affinito told BloggingStocks Monday that wheat's climb is part of a global trend of higher commodity prices, driven by emerging market economic growth.
"We've got solid wheat demand. As these emerging market economies develop, they're going to consume more wheat and food stuffs, that's undeniable, and its been forcing up the price of all food stuff commodities," Affinito said. "This will force up the price of cereals, pastas and other foods in the United States, and of course will increase U.S. inflation."
Affinito added that he now expects 2008 U.S. CPI inflation of 2.7-3.0%, if there is not a substantial, sustained pull-back in oil prices.
$13 wheat?
Affinito said wheat could hit $13 per bushel in 2008, and he expects cereal companies -- many of which have already increased prices -- to compensate with another round of price hikes.
"They have to increase prices to protect their margins," Affinito said. "It may result in some consumers switching to generic brands, or switching to other breakfast options, especially if a box of cereal rises above $7. But the cereal companies have no other choice."
For a gallery of all the grocery prices that might be affected, see WalletPop.
2008 wheat supply
Affinito added that if wheat stays above $10 per bushel, he expects the sector to see new growers enter the market, causing increased production, to a degree.
"Wheat's high price will encourage more growers -- that's a basic economic law -- and that will help, somewhat. But the problem is complicated by Russia's capping its grain exports at 12.5 million tons per year," Affinito said. "Eventually, large wheat growers like the United States and Canada will compensate, but strong demand will keep prices high in 2008."
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Reader Comments (Page 1 of 4)
12-18-2007 @ 2:29PM
momofwings said...
What do they expect people to eat?
Between the price of Oil, now the grains
Where is the leader of this country?
I think his last name is Bush or something like
that.
Of course he does not have to worry about
the cost of things.
It is time he goes back to Texas
12-19-2007 @ 2:33PM
mike hall said...
its ok, i fell in the shower this morning got right up and blamed that lousy prez we have i know he planned it all.I think impeachment is the order of the day ,for a man who can command hurricanes to wipe out a race of people, geez what power this man has, so lets impeach him so tricky dick cheny can become our new prez, i am sure america would be happy with that because if you dont vote for him he always has the option to accidently shoot you huh?
12-19-2007 @ 3:25PM
Jessica, Bossier City LA said...
how can you blame Bush for wheat going up?? You are insane. One of those people who just want to blame someone. Bush has money because he chose to INVEST in oil. He isnt the only one who has chosen to go that route. Do you hate everyone who invests their money well?
12-19-2007 @ 6:04PM
trknrd said...
so now Bush has caused wheat prices to go up. Did you read the article? It's a matter of supply and demand. If Russia exported more to other countries {they have the capacity} prices would stabilize. But I guess Bush has control over Russia too. What an a idiot you are. I suppose he controls the weather in Argintina too. Momofwings get your friggin head out of your arse
12-18-2007 @ 3:53PM
JILL said...
Ingredients in Cheerios: Whole Grain Oats, Modified Corn Starch, Corn Starch, Sugar, Salt, Tocopherols, Trisodium Phosphate, Calcium Carbonate, Natural Colour. Contains Wheat Ingredients.
SHOW ME THE WHEAT!!
12-20-2007 @ 1:06AM
lorran said...
The wheat products are added processed wheat 'glutens' ---see:
I can't eat it anyway (as a celiac) nor should one in ten people in the US that are probably also undiagosed celiacs... if they would stop putting wheat in everything from 'Corn' Flakes to Ice cream there would probably be enough for to keep making pasta at a fair price... Wheat is abused in the US for it's addictive glutens that are put into everything in most large major brands to make it more 'tasty' and ADDICTIVE. Go gluten free (GF) and help with this wheat shortage 'crisis'..
12-19-2007 @ 2:18PM
W.D.C said...
You should havea little bit more, It does say Natural Almond Flavor, Vitamin E, Ect. Wheat Flower
12-19-2007 @ 8:31PM
Dani said...
Modified Corn Starch can also contain wheat. Wheat is found in most processed foods, even if it doesn't directly indicate that with the label of "wheat". I have a wheat allergy so I have to avoid any foods that contain products such as modified food starch, Hydrolyzed vegetable protein, Gelatinized starch (a few of the many products) which all all contain wheat.
Eat gluten free foods and avoid the price hikes we might soon be seeing of wheat based food products. It's not Bush's fault, its mearly the result of supply and demand, something we were all taught in 4th grade!
12-19-2007 @ 7:36PM
Gene said...
When Cheerios first were manufactured the name was "CHEERIOATS." That was in the late '30s or early '40s.
12-19-2007 @ 2:12PM
lorran said...
I can't eat it anyway (as a celiac) nor should one in ten people in the US that are probably also undiagosed celiacs... if they would stop putting wheat in everything from 'Corn' Flakes to Ice cream there would probably be enough for to keep making pasta at a fair price... Wheat is abused in the US for it's addictive glutens that are put into everything in most large major brands to make it more 'tasty' and ADDICTIVE. Go gluten free (GF) and help with this wheat shortage 'crisis'..
12-19-2007 @ 2:11PM
lorran said...
I can't eat it anyway (as a celiac) nor should one in ten people in the US that are probably also undiagosed celiacs... if they would stop putting wheat in everything from 'Corn' Flakes to Ice cream there would probably be enough for to keep making pasta at a fair price... Wheat is abused in the US for it's addictive glutens that are put into everything in most large major brands to make it more 'tasty' and ADDICTIVE. Go gluten free (GF) and help with this wheat shortage 'crisis'..
12-19-2007 @ 2:20PM
doc said...
momofwings said...
What do they expect people to eat?
Between the price of Oil, now the grains
Where is the leader of this country?
I think his last name is Bush or something like
that.
Of course he does not have to worry about
the cost of things.
It is time he goes back to Texas
shut up dumbass
12-19-2007 @ 2:22PM
crgdawg said...
Where is the leader of this country??? Are you serious? Exactly what kind of a role do you have envisioned for the President of the US? Prices rise, that's what they do, regardless of who the president is. You don't have to read very many of these posts to find the real problem with this country. Too many of our citizenry are just too stupid to be good americans, and like all great empires of the past, we shall fall from within...
12-19-2007 @ 4:48PM
Roger said...
Exactly. The President does not control prices nor can he stop price increases. What your CONGRESSMEN can do is stop farm subsidies and let those fields that are keep baring now produce wheat and other crops. Next will be corn because we use most for bio-fuel. We need to stop converting farmland for other purposes than growing food!
12-19-2007 @ 2:24PM
Urly Gurly said...
I'm with Jill- Show me the wheat! Most of this stuff only has a small percentage of it anyway. It's just an excuse to gouge comsumers.
It's outrageous, however I eat generic cereal WHEN I get a taste for it. I think I'll stick to my generics as I don't need a "Name" on my food to enjoy it. And since I don't have children things like oatmeal and cereal lasts months for me.
12-19-2007 @ 2:27PM
Alley said...
It is not Bush's fault that the oil or the anything else is going up except for the greedy mofo's that own all the companies. Eggs damn near 4.00 dollars a dozen, someplaces milk is over 4.00 dollars, oil about 80.00 dollars a barrel. Gas is not that expensive. I see a new depression era coming soon and it is not going to be anyones fault except the people that are money hungry and so far I see it starting to smack evreyone in the face. If we all learned to grow our own food buy our own chickens for eggs and a few milk cows, they would have no choice but to lower the price. With all these illegal aliens here in the US there is a higher demand on our food. Send them all back or find an island to ship them to just like all the people in prison either send them over seas or ship them to an island instead of just sitting in jail not doing a damn thing. This country has to start to use some common sense when it comes to the american people and not worry about themselves and how much money they are making. Maybe they (government) need to take a pay cut like everyone else in AMERICA!
5-10-2008 @ 5:38PM
Patty said...
I agree with "they (government) need to take a pay cut like everyone else in AMERICA!"
I've always thought that if the government folks and others running this country had to live on minimum wage for just 6 months there would be alot of positive changes taking place.
12-19-2007 @ 3:39PM
scott said...
sounds like castro and the mariel-key west fla. answer in1979-80
12-19-2007 @ 3:50PM
Damian said...
I didn't know Bush controlled the Wheat Market?Wow!! The droughts must be his fault too.
12-19-2007 @ 2:51PM
Robert Johnston said...
Hey , Chicken Little , are you really that stupid? Pertainant facts: Value of raw grains in selected products: (1.) 2lb box of Wheaties, 33 cents. (2) 2lb box of Corn Flakes 16 cents (3) 2lb box of Cheerios 25 cents . So you can see that the cost of the grain is a very small part of the total cost of the products!!!