News
09.09.2009
Wheat Prices Up Again
Wheat prices went up by 4% in the short space of just one week, adding to the value of investment in agricultural land. The Chicago Board of Trade, the world’s largest futures exchange recently reported this steep increase in wheat, one of the most essential soft commodities.
.pr-inside.comThe price of wheat experienced a sharp rise on the back of news from
Australia that unusually dry weather conditions are highly likely to affect crop yields this year.
According to the Australian Bureau of Meterology, Australia’s largest wheat-producing regions have a strong chance of receiving below-average rainfall during the spring months, vital to crop production. The spring (September to November in the southern hemisphere) looks set to drier than average in parts of Queensland, New South Wales, South Australia, Victoria and Tasmania. The drier conditions are due to the climatic influences from the phenomenon known as ‘El Niño’, a weather pattern brought in by the Pacific.
Australia that unusually dry weather conditions are highly likely to affect crop yields this year.
According to the Australian Bureau of Meterology, Australia’s largest wheat-producing regions have a strong chance of receiving below-average rainfall during the spring months, vital to crop production. The spring (September to November in the southern hemisphere) looks set to drier than average in parts of Queensland, New South Wales, South Australia, Victoria and Tasmania. The drier conditions are due to the climatic influences from the phenomenon known as ‘El Niño’, a weather pattern brought in by the Pacific.
As the world’s fourth largest exporter of wheat, Australia is a major player on the soft commodities market. Unsurprisingly, any news about expected unfavourable growing conditions in Australia immediately affects the price on wheat.
However, in spite of Australia’s predicted fall in wheat yields, worldwide yields are expected to increase this year. According to the US Department of Agriculture (USDA), a world authority on agricultural supply and demand, worldwide wheat production will grow by 2.8 million tonnes during the 2009/10 marketing year.
However, in spite of Australia’s predicted fall in wheat yields, worldwide yields are expected to increase this year. According to the US Department of Agriculture (USDA), a world authority on agricultural supply and demand, worldwide wheat production will grow by 2.8 million tonnes during the 2009/10 marketing year.
The latest USDA report (12 August) expects increases in production in several key grain-growing countries such as the US and Ukraine while yields will fall considerably in others, particularly Russia, Canada and Argentina. Wheat production in Ukraine, currently the focus of intense foreign investment in agricultural land, will go up by 1 million tonnes this year. The intense wheat production in Ukraine was confirmed in a recent ground-breaking report from BBC Newsnight. According to Jeremy Cooke in Ukraine, “the wheat harvest is going full tilt... but as fast as they can get the wheat out of the fields, it’s being gobbled up by a ravenous international market”.
This together with an increase in wheat exports of 2 million tonnes add to the growing importance of Ukraine as a major contributor to the global food shortage. However, the USDA report highlights that global consumption of wheat will rise by 2.7 million tonnes this year, which confirms that more agricultural land is needed to meet this demand.
With its vast tracts of unused or under-utilitised land, Obelisk agrees that Ukraine is one of the few places in the world where it’s possible to greatly increase wheat yields without detriment to local communities or the environment. It’s therefore hardly surprising that Ukraine land currently tops investment in soft commodities options.
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