One thing I have been amazed at is the drop in global grain prices. Unlike many of the metals and even oil, inventories are at rock bottom lows. Part of the margin liquidation. The decreasing demand for ethanol will help but it seems like a potential dangerous situation . I personally do not have any current grain exposure though I still have personal beef and pork belly exposure. Anyway, this article on Bloomberg caught my eye.
The credit crunch is compounding a profit squeeze for farmers that may curb global harvests and worsen a food crisis for developing countries.
Global production of wheat, the most-consumed food crop, may drop 4.4 percent next year
In Brazil, the world's third-biggest exporter of corn after the U.S. and Argentina, production may fall more than 20 percent because farmers can't get loans to buy fertilizer, said Enori Barbieri, a National Corn Producers Association vice president. The nation's coffee harvest, the world's largest, may drop 25 percent for the same reason, said Lucio Araujo, commercial director at farmer cooperative Cooxupe, located in Guaxupe.
this while inventories are at rock bottom lows
Global inventories of corn, wheat and soybeans before the harvest in the Northern Hemisphere next year will be the second- lowest since 1974, enough for 67 days of consumption, compared with 144 days of supplies in 1986, U.S. data show.
``Stockpiles are going to be extremely tight,'' said AgResource's Basse. ``The world cannot afford any dislocation in production next year, or there will be a real shortage.''