Limit on wheat prices raised

With wheat prices touching all-time highs, the Commodity Futures Trading Commission on Friday took steps to allow the daily limit on price moves to double, to 60 cents a bushel from 30 cents.

Additionally, the limit will rise to 90 cents a bushel on the next day after a 60-cent limit is reached.

The new price limits will take effect Monday.

…Analysts said the high prices reflect concerns that supplies of spring grain will fall short of demand.

Domestic inventories of hard red spring wheat, used to make bread and pasta, will fall 40 percent from a year earlier by May 31, according to the Agriculture Department. Inventories will be the lowest since 1948, economists said.

“There’s desperation, and there’s the situation where they are not worried about the price, they just have to buy it,” said Ben Barber, commodity broker with Bell Commodities Ltd. in Melbourne, Australia. “It’s in uncharted territory now, and how far it goes is anyone’s guess.”

Chicago Tribune