Posted on 08/05/2010 4:23:11 PM PDT by HogsBreath
Russia, the world's third wheat exporter, Thursday banned grain exports for the next four-and-a-half months due to a record drought that has destroyed millions of hectares (acres) of its land.
Wheat futures shot up to new two-year highs on commodities markets after the sudden announcement from Prime Minister Vladimir Putin raised concerns about global grain supplies
(Excerpt) Read more at news.yahoo.com ...
This is bad. I would hate to see what happened to rice a few years ago be repeated with wheat.
Our family has gone through over 120 lbs of flour this year alone.
Wish I had known this was going to happen before I sold my wheat.
That was my first thought too.
OMG, my husband came in for dinner and we haven’t sold our wheat yet, I thought we had and was waiting for a check.
So much for the “rule of law.” A country that obeys it would’ve purchased grain on the market and distribute it as it sees fit.
Focus Turns to Glencore's Role in Wheat Ban - August 5, 2010 - When Russia halted wheat exports two days after Glencore International AG's top executive in the country urged them to do so, it put the spotlight on the commodities trading firm long known for its connections and deep market intelligence. The Switzerland-based company quickly distanced itself from the comments, with a spokesperson saying they "do not in any way reflect the views of Glencore." But based on its role in the market, Glencore and other commodities traders could be suffering from rising wheat prices and could benefit from Russia's decision, which would allow it to void its money-losing contracts. Rising wheat prices hurt suppliers such as Glencore because they likely had signed contracts to supply wheat at much lower prices. Since the beginning of July, wheat prices jumped nearly 70%, including an 8% rise on Thursday. Dan Manternach, director of agricultural services at Doane Advisory Services in St. Louis, Mo. said that the rising prices meant that Glencore and other suppliers, "would either sell it too cheap or they might not be able to meet the obligations," which would hurt companies' reputation or even lead to lawsuits as buyers demanded that their contracts be fulfilled, he said. A government-imposed ban on exports is considered as a "force majeure," which effectively voids the contract and frees both parties from liability in the event of circumstances beyond their control.Glencore, founded in 1974 by trader Marc Rich, has long been known for its trading savvy and global information network that allows it to trade everything from grains to coal to zinc.
The local wheat price was extremely low at harvest time, about 1-1/2 months ago. The local elevator for a time only offered $2.38 a bushel, most of it went for about $3.00 per bushel. The excuse by the grain marketers (Cargill) was low protein content (which was not the case). Now after the harvest is over the price is up around $7.00 per bushel at the port.
There were 2 days that they refused to buy wheat at all, blamed that on the Gulf oil spill.
It was a very wet year and the crop did not root deeply and production per acre was down and the price was down.
If you are hungry this year, do not blame the farmers.
Wow, you got lucky! I sold most of mine for $3.65.
They used the low protein excuse here in KS, too. We had good weather except for some excessive heat in June, which caused the heads not to fill completely. 60 bushel straw and 30 bushel wheat.
ADM, Continental, Cargill own distribution.
AgriPro owns licensing contracts with the University seed research programs. PVPA will be another nail in the coffin of producers.
Only way out I see is specialized production integrated with local processing and sold for end use. Otherwise we are simply pawns in the game. We only win when production dies and we are nimble. Poor strategy.
My family has farmed here since the 1880’s. Before that in Alabama and Georgia.
Most of my ancestors left Alabama during Reconstruction. They were burned out by an corrupt oppressive central government. They resisted the occupiers and had to GTT to survive. They did.
Now we face the identical circumstances, but this time it is much wider spread.
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