Speculators lift grain prices after bumper harvests
With more than 35m tonnes of ‘paper’ wheat — traded in the busiest day on the Chicago market last year, these speculators play a big role in futures markets, and the real market — the US government has been prompted to suggest greater regulation of their activities, which can shove up food prices, affecting inflation.
With the US dollar recently at its lowest level against the euro in more than a year, dollar-priced commodities are attractive to non-US investors.
That is the main reason gold has been selling for over $1,000 an ounce, its highest nominal price ever.
But the prices of other commodities, including agricultural raw materials like sugar, have also soared, boosted also by hopes for recovery from the world’s worst economic slump in decades.
According to the internationally renowned investor, Jim Rogers, the commodity boom still has some way to go, because, for decades to come, supplies of raw materials, especially agricultural commodities, will struggle to keep up with demand.
Investors like him are speculating in grain, this despite the prospect of one of the biggest US harvests in memory.
