Wheat Prices Set to Spike as UN Warns of Disease Threat
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Wheat prices may be set for a major spike after a UN warning that a new “highly pathogenic strain of wheat stem rust called Ug99″ threatens 25% of the world’s wheat crops.
This from The World Tribune:
Scientists and international organizations focused on controlling wheat stem rust have said 90 percent of world wheat lines are susceptible to Ug99. The situation is particularly critical in light of the existing worldwide wheat shortage.
The fungus causes dark orange pustules on stems and leaves of infected plants. The pustules can completely girdle stems, damaging their conducting tissue and preventing grain fill. Yield losses may reach 70 percent, while some fields are totally destroyed. If stem rust arrives early in the growing cycle, losses are higher. Spores released by the fungal pustules are spread by the wind and may travel great distances in storms.
“The soaring price of agricultural commodities like wheat, corn and soybeans is one of the biggest news stories on the planet right now,” says Kevin Kerr in The Daily Reckoning.
“The hope that the commodity bubble will burst is also a fantasy. The fact of the matter is that we are in a new paradigm for commodities and the old-school thinking about how commodities used to be traded has to be changed. And this is true of most commodities – none more so than the agricultural ones. Sure, speculation is a part of this puzzle, but to say it’s all speculators and hedge funds that are causing the run-up is a sad mistake.”
Bill Bonner theory is that “the feds’ inflation will goose up prices of commodities, gold, consumer prices and oil – but not the real economy.
“So far, that seems to be what is happening. The CRB commodities index is up 24% since last September. Oil has gone up 25% this year. Natural gas has risen 49%. Gold, meanwhile, has only gone up 4.8% in 2008…but this is after a correction; remember it was over $1,000 just a few weeks ago.”