Why is wheat going up so much

its not like the worlds population just exploded the last six months or that the world started eating more the last six months perhaps the atkins diet is a fraud?

email Larry Williams. He would likely give you a straight answer. ireallytrade.com

its not like the worlds population just exploded the last six months or that the world started eating more the last six months

perhaps the atkins diet is a fraud?

Here is(are) the answer(s).

http://www.google.co...at so expensive

Edited by milbank, 25 February 2008 - 07:16 PM.

It has to do with the cream of wheat diet. I heard all of hollywood is on it.

I'm not sure about the magnitude of the runup but I do know that US wheat invetories are nearing 60 year lows. When you consider the fact that we're a major wheat exporter you can see the problem. It would be sort of like Suadi Arabia running low on crude oil. I'm trying to remain as objective as possible here about the secular commodity bull. There will or should be corrections. However, when you really examine all the macro factors I think this commodity bull will be much more powerful than the 66-82 bull. When you consider currency and capital flows and the location of the populations enjoying the most rapid economic growth it's not too difficult to understand. Too many US money managers are way too US centric. We are around 7% of the worlds population. Commodities are global and we are going through peak CL. Commodities are much more sensitive to economic growth relative to population size and NOT relative to the size of the economy. This is a very important factor to comprehend. So manay managers think this is a traditional cycle but if you look at the big picture it's simply not so.

Cropland coming out of wheat production and into corn or soybeans. At this time, there is greater money to be made in corn and soybeans. Biofuels along with the export to China of Soybeans is driving the production cycle. It does boil down to supply/demand.

Cropland coming out of wheat production and into corn or soybeans. At this time, there is greater money to be made in corn and soybeans. Biofuels along with the export to China of Soybeans is driving the production cycle. It does boil down to supply/demand.

hmmm...so we are sacrifycing wheat production for biofuels

that makes sense

can we expect the same shorteges for sugar

Edited by iron cross, 25 February 2008 - 08:09 PM.

Sugar. What a wonderful industry. Talk about govt. price supports. Two types of sugar production. Beets and cane. Both are supported exponentially. Too expensive to take this out of production. The new farm program has still not been passed. That guarantees higher prices for all "Big Farma". That was Rodger's I believe.

Cropland coming out of wheat production and into corn or soybeans.

They're also using wheat as livestock feed since all the corn is being diverted to ethanol. That further cuts down on the wheat supply.

I think there are a lot of reasons but supply demand has to be one. I think one could argue that commodities are a good hedge against inflation. I think that a lot of commodities look bullish in an equity market that many believe is bearish. I think access to commodity ETFs has made them more available to retail investors and momentum traders. S/D agument: The developing world is becoming relatively more wealthy then it was in the past. It makes sense that they would spend their new found wealth to increase the quality of their diets. IE protein. Think of it like this: It it takes 1 pound of grain to feed a family It takes 4 pounds of grain to feed the chickens who will produce the same amount of food in terms of calories. It takes the equivalent of 8 pounds of grain to feed the cattle who will be butchered for the same family etc. Think about it this way, there is only so much land to grow food. With the developing world increasing its population (and increasing its consumption), different goods will compete for (planting) space. Not to mention ethanol and other biofuels.

Edited by CHAx, 25 February 2008 - 08:36 PM.