Commodity prices – WTF?
Posted by Rich Sweeney on April 10, 2008
More on food prices. From the inbox:
BLS data say that food prices are increasing on the order of 3.5-4.5% with grain prices up only about 6.6%, but commodity prices for grains have skyrocketed. Any idea why there is a difference? Even the local bakery in Ithaca has a per loaf bread charge that tracks prices of flour and other grains and is updated weekly, so it doesn’t seem like it should take much time for commodity prices to hit consumers.
My response was basically, “I got nothin”. Then another friend directed me to this article from last week’s NYTimes, which at least let me know that I’m not the only one clueless here. Basically futures and cash market prices for wheat and soybeans have been all out of whack for some time now and nobody knows what the eff is goin on. As Scott Irwin of Illinois says in the article, “These are highly competitive markets with very experienced traders. Yet they are leaving these profits alone? It just doesn’t make sense.”
Any smartypants CT readers care to put forth an explanation?