Commodities Headed For Bull Market As U.S. Drought Withers Crops

[xchrom]

http://www.bloomberg.com/news/2012-08-21/commodities-headed-for-bull-market-as-u-s-drought-withers-crops.html

Commodities are poised to enter a bull market led by surging grain futures amid the worst U.S. drought in half a century and on mounting optimism growth in the U.S. and stimulus from China will boost demand.

The Standard & Poor’s GSCI Spot Index of 24 raw materials rose as much as 0.7 percent to 673.82 today in London, the highest since May 3. The gauge has jumped 20 percent from this year’s lowest close of 559 on June 21. A close at this level will signal commodities entering a bull market.

The worst U.S. drought in a half century sent soybeans to an all-time high of $17.0475 a bushel today, while corn reached a record $8.49 a bushel on Aug. 10 on the Chicago Board of Trade. The Department of Agriculture has slashed its corn harvest forecast by 27 percent since June, after declaring more than half of U.S. counties as disaster areas while drought conditions stretched from California to New York.

“The grains have been the strongest performing subsector in commodities the past few months, and that has purely been driven by supply-side considerations and the U.S. drought in particular,” said Sudakshina Unnikrishnan, a London-based analyst at Barclays Plc. “While the rest of the commodity sector has been grappling with euro zone debt and macro headwinds, the grains have been isolated from that.”

[Zalatix]

1. Perhaps this is why America will never build skyscraper/vertical farms?

http://en.wikipedia.org/wiki/Vertical_farming

If we could grow grains in these climate-controlled facilities then grain futures would take a hit.

I'm betting the agricultural industry would fight vertical farms tooth and nail.

[LiberalEsto]

2. Let the hunger games begin!

I fully expected the commodi-traitors would manipulate food prices and help starve the poor who can't afford bread or cereal.
Those who speculate over the price of food should be stripped of their profits and imprisoned.