Wheat soars

Never mind $100 oil.   It's wheat prices that have reached the stratosphere:

Decades from now, farmers will
still talk about this week – the moment when wheat in Minneapolis
soared to nearly $20 a bushel.

Like a 100-year flood, spring wheat prices have risen
relentlessly all winter, obliterating every record in sight. At the
Minneapolis Grain Exchange, wheat fever pushed prices to $19.80 a
bushel in trading Friday – nearly triple the record from 1996.

To grain experts, it's a warning of what happens when grain
supplies don't keep up with rising demand. Fear of scarcity and
shortage push markets far beyond any norm.

"This wheat market has given us a glimpse of the what-if – what
if we don't deliver the goods on the production side, because the
demand is here," warned Ed Usset, a grain marketing specialist at the
University of Minnesota. 

In other words, welcome to Peak Food:

For decades, agriculture's great
problem has been surplus, not scarcity. And ruinously low prices, not
ruinously high ones. Farmers have complained bitterly about this, but
consumers benefitted from the great abundance of grains and proteins.
This week's action in Minneapolis previews a different sort of

"It's telling us how close we are to that tipping point in all
commodities," said Usset, a former grain trader. "Every commodity I
know would like more acres: corn needs more, soybeans need more …
durum wheat, malt barley, sunflowers, they all want a little more

The Minneapolis Grain Exchange
itself is scrambling to adjust to the explosive markets. On Friday, the
maximum daily trading limit rose to $1.35 a bushel – compared with 30
cents last week – and soon, the maximum daily limit will vanish.
Officials suggested they had little choice. Markets were so volatile
that they locked up day after day, so nobody could trade wheat futures
at all.

And the next shoe to drop: Sara Lee says it's raising bread prices for the fourth time in 18 months.