XIAM007

Making Unique Observations in a Very Cluttered World

Saturday 7 August 2010

The price of wheat has surged more than 80% from its seven-month low in June -soon paying more for a loaf of bread -

The price of wheat has surged more than 80% from its seven-month low in June -soon paying more for a loaf of bread -

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 With wheat futures soaring to their highest level in two years, you could soon find yourself paying more for a loaf of bread at the local grocery store.
The price of wheat has surged more than 80% from its seven-month low in June, rallying to its highest level since August 2008 this week, as Russia said it would ban grain exports until Dec. 1 due to a drought that has destroyed more than 20% of its wheat crop. Prices retreated Friday but still remain up 10% for the week.


If prices resume their upward trajectory, you could wind up paying 25% to 30% more for a loaf of bread and at least 10% more for a pizza by the end of August or early September, said Darin Newsom, a senior analyst at Telvent DTN, an agriculture and commodities information company.
That would translate into a price hike of as much as 90 cents more for a $3 loaf of bread, and a bump of $1.40 for a $14 pizza.
"Wheat is moving up so much, there's going to be a ripple affect on what we're seeing at stores and restaurants," said Newsom. "We haven't seen it play out yet, but we certainly will."
Some think it's still too soon to plan for price hikes at the retail level.
"Even though the price has gone up in the futures market, it has to continue to go higher or stay at these levels for another 20 or 30 days in order to justify a rise at the store," said Mark Schultz, a chief analyst at Northstar Commodity. "Longer term, provided that the drought in Russia doesn't get better, we'll likely start seeing prices have to move higher in the retail level, I'm just not sure if the rise in [futures] is significant enough yet."
If wheat prices do stay this high, expect to pay more for your rolls and pastries too, said Robb MacKie, a spokesman for the American Bakers Association.
"[Wheat] is the number one ingredient for bakers and therefore one of their top costs," he said. "If prices hold at this level you might turn around in three months and say, 'Hey, I used to pay $1.25 for this baguette and now I'm paying $3.25 -- what happened?"
A spokeswoman for one of the world's largest food companies, General Mills, said the company doesn't comment on its pricing policies.
But a Panera Bread spokeswoman said the bakery-cafe has locked in its wheat prices through the first half of 2011, saying the company believes "the market will self correct once the froth is out from all the speculation."
Out of wheat?: Because Russia is one of the world's largest grain exporters, its wheat shortage has significantly driven up demand for the grain, and investors are worried that other areas of the world may be next to see their crops dry up.

A chunk of ice four times the size of Manhattan has calved from Greenland's Petermann Glacier -

A chunk of ice four times the size of Manhattan has calved from Greenland's Petermann Glacier -




A chunk of ice four times the size of Manhattan has calved from Greenland's Petermann Glacier, scientists announced today.
The last time the Arctic lost such a large chunk of ice was in 1962.
"In the early morning hours of August 5, 2010, an ice island four times the size of Manhattan was born in northern Greenland," said Andreas Muenchow, associate professor of physical ocean science and engineering at the University of Delaware.
Satellite imagery of this remote area at 81 degrees north latitude and 61 degrees west longitude, about 620 miles (1,000 kilometers) south of the North Pole, reveals that Petermann Glacier lost about one-quarter of its 43-mile- (70-km-) long floating ice-shelf.
Trudy Wohlleben of the Canadian Ice Service discovered the ice island within hours after NASA's MODIS-Aqua satellite took the data on Aug. 5, at 8:40 UTC (4:40 EDT), Muenchow said.
Petermann Glacier, the parent of the new ice island, is one of the two largest remaining glaciers in Greenland that terminate in floating shelves. The glacier connects the great Greenland ice sheet directly with the ocean.
The new ice island has an area of at least 100 square miles (260 square kilometers) and a thickness up to half the height of the Empire State Building, which is 1,454 feet (443 meters) from the ground to the top of its lightning rod.
"The freshwater stored in this ice island could keep the Delaware or Hudson rivers flowing for more than two years. It could also keep all U.S. public tap water flowing for 120 days," Muenchow said.
The island will enter Nares Strait, a deep waterway between northern Greenland and Canada where, since 2003, a University of Delaware ocean and ice observing array has been maintained by Muenchow with collaborators in Oregon, British Columbia, and England.
"In Nares Strait, the ice island will encounter real islands that are all much smaller in size," Muenchow said. "The newly born ice-island may become land-fast, block the channel, or it may break into smaller pieces as it is propelled south by the prevailing ocean currents. From there, it will likely follow along the coasts of Baffin Island and Labrador, to reach the Atlantic within the next two years."
The last time such a massive ice island formed was in 1962 when Ward Hunt Ice Shelf calved a 230 square-mile (600 square-km) island, smaller pieces of which became lodged between real islands inside Nares Strait. Petermann Glacier spawned smaller ice islands in 2001 (34 square miles, or 88 square km) and 2008 (10 square miles, or 26 square km). In 2005, the Ayles Ice Shelf disintegrated and became an ice island (34 square miles) about 60 miles (97 km) to the west of Petermann Fjord.
In July, a chunk of ice the size of Manhattan fell off of Greenland's Jakobshavn Isbrae glacier.