Nogger's Blog

08/02/11 -- This time twelve months ago Russia was forecasting a 2010 grain crop of 97 MMT and exports at 22 MMT. March London wheat was GBP96/tonne, March Paris wheat was EUR126/tonne and barley was pouring into intervention all over Europe. In America soybeans were under USD10/bushel, corn was sub USD4/bushel and wheat below USD5/bushel.

And this was posted on the blog: Fasten Your Seatbelts, We're Going Sharply Higher

"At least that's according to Professor Harald von Witzke of Humbolt University. He says that assuming that oil will be back up above USD100/barrel by 2017 (which seems perfectly reasonable), then we could see wheat prices 70% higher by then, with corn up over 100%.

"It is an interesting theory, and not one that I would argue ferociously against. That said, when asked why prices currently don't reflect this, the professor said that the sharply higher levels we saw a few years ago had stimulated increases in production.

"Won't that happen again then if wheat goes back to GBP200/tonne?

"Maybe we are in for a decade of extreme volatility, where we get these mad price spikes more frequently, followed by deep troughs of despondency as everybody jumps on and off the various bandwagons all at the same time? That wouldn't surprise me in the slightest.

"Pig farming I think they call it."