The scramble for grain

You would usually think that high grain prices would start to curtail demand but that is not the case for an inelastic commodity. In fact, there has been a scramble for grain with many countries trying to lock0in supply before there are shortages. Food inflation will lead to political unrest so many developing countries are not waiting for prices to turn down. Consequently, export announcements and rain deal are becoming an important driver for the market. Wheat was up again today as a Pakistan announced a new purchase and India lifted import duties on flour.

Planting expectations are expected to be about 4% higher but that will not be enough to offset the current hording mentality.