Wheat Prices Hit Two-Year High After UN Warns of China DroughtWheat prices reached their highest prices in more than two years after a U.N. agency said China may face a wheat-supply shortage because of a recent drought, The Wall Street Journal reported.

Soft red winter wheat for March delivery on the Chicago Board of Trade reached $8.8075 a bushel earlier Tuesday, which was up 22 cents for the day and marked its highest intraday trading level since August 2008, the Journal said. Wheat futures prices on both the Minneapolis Grain Exchange and Kansas City Board of Trade also jumped Tuesday.

Asia's wheat supply may be compromised by a drought in China's primary winter wheat-producing region, the Journal said, citing a report from the U.N.'s Food and Agriculture Organization.

Commodity prices have spiked in recent weeks on harsh weather that has hit various parts of the world. Sugar prices last week surged to a three-decade high because of supply constraints stemming from cyclones and floods that have recently hit Australia, the world's third-largest sugar producer behind Brazil and Thailand.

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One of China's governments most daunting tasks is feeding billions
of people everyday. Its hard to even get your mind around but
to keep the china machine going they have to feed the people.
The government in China does not literally feed all its citizens
but they do provided all the infrastructor and industry
and distribution ext.ext. The idea of that breaking down is scary!
We had better be growing as much food as we can in the U.S.
its shaping up to be the new big oil!! We could pay off the debt
pretty fast when they get hungry!

February 08 2011 at 10:09 PM Report abuse rate up rate down Reply

Stop all subsidies to let fields idle, eliminate cap restrictions on overseas grain sales. Grain prices will fall but will be offset by 3x the demand and it will stimulate the domestic and world economy while saving taxpayer dollars that get used for the subsidies.

February 08 2011 at 7:04 PM Report abuse +2 rate up rate down Reply
1 reply to thedtecter's comment

I don't care if farm subsidies are stopped altogether, but you might check and see exactly where the subsidies go. I am a farmer in the western US and we receive no subsidies at all. And, subsidies are based on the market price. When the market is high, there are no subsidies. CRP and other programs are still in effect though. BUT...when wheat prices rose a few years ago , to a profitable level I might add, CRP ground was taken out of the federal program and put back into production, much to the dismay of environmentalists. The US farmer just can't win. If we make a profit, we piss of the consumers. If we don't make a profit and the government creates programs to enable us to stay in business so consumers have food to eat, then we still piss of the consumers. I think the main point people have to get through their heads is, you need farmers to grow your food, like it or not. And we HAVE to make a profit or we can't stay in business. So, in reality, high commodity prices will result in higher food prices at the retail level, but prices have to rise at some point or there will be no farmers left in business.

February 08 2011 at 9:33 PM Report abuse rate up rate down Reply