Wheat prices surge to 2012 high, threatening to speed food inflation

Posted by Kim Chipman and Megan Durisin, Bloomberg News

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Benchmark wheat in Chicago climbed above US$8 a bushel for the first time in almost nine years amid growing inflation pressures that threaten to raise already soaring food prices worldwide.

Futures linked to other grain varieties in the U.S. and Europe also surged, with Paris milling wheat futures nearing an all-time high and Minneapolis spring wheat reaching the priciest level since April 2008.

Top importers are bulking up on grain amid limited global supplies after poor weather struck harvests in major exporting countries this year. That’s spurred wheat’s longest streak of monthly gains since 2007. Some growers also are contending with dry weather at planting time as well as soaring fertilizer costs that risk denting next year’s harvests.

“Speculators keep talking about inflation and are buying commodities for an inflation trade,” Jack Scoville, vice president for Price Futures Group in Chicago, said in a note…read more.