From Agora’s 5 Minute Update
“Wheat is up another 20 cents this morning… that’s a two-day record rally.” says our Maniac Trader Kevin Kerr. Wheat has been shooting up all year long, and is currently at an all-time high of $7.60 a bushel. Since the start of 2007, wheat’s up 51%, and according to Kevin, it still has room to grow [sic].
“Wheat is actually becoming a victim of its own success,” says Kevin. “It seems like there just wasn’t a lot of forethought or planning on the government’s part… It just told farmers, ‘Grow wheat and we’ll pay you’ without a serious plan to combat an increase in transportation, storage and other rising cots.”
“In essence, record wheat prices are now the result of another infrastructure problem. The agricultural pipeline is full and not able to handle the increased volume. Crops are perishable and time is money. With land rates, fuel costs and wages rising, every additional cost takes a bit out of an already shrinking profit pie.”