Drought concerns (Australia, El Niño) continue to drive up the price of wheat:
Wheat prices rose to a 10-year high on concern that drought will reduce supply from Australia, the third-largest exporter of the grain.
Prices earlier soared by their daily limit for a second day and reached the highest since June, 1996, in Chicago. Australia’s wheat output may fall below the record low of 9.6 million tonnes in 2002, said AgRisk Management, a Sydney-based forecaster.
“The drought situation in Australia is getting worse and worse, so it’s quite possible we’ll get a record-low crop this year,” said Brett Stevenson, of AgRisk.
Raises again the interesting question Roger Pielke Jr. asked a couple of weeks back:
What has a bigger economic impact, ENSO or ENSO predictions?
If we follow Roger’s logic, we should never try and understand anything, because then we might be able to predict or anticipate it. If he had said which is more costly an wrong prediction of an El Nino or an El Nino itself, he might have had a point, but as it stands it is simply superficial.