Profit from the Boom in Grains: More upside for cereal profits?

Posted March 5, 2008

"On February 25th, the price of top-quality spring wheat on the Minneapolis Grain Exchange surged more than 25% in one day. Spring wheat is now up more than fourfold and outpacing all commodities by a country mile." — Eric Roseman

by Eric Roseman

Baltimore – (TFN): Over the last 12 months, the biggest bull market in commodities has NOT been in gold, platinum or tin. Instead, the grains, or more specifically, wheat, have dominated the raw materials complex since late 2006.

Indeed, spring wheat has been the commodity king over the last year, during the lowest stockpiles of wheat in 60 years.

On February 25th, the price of top-quality spring wheat on the Minneapolis Grain Exchange surged more than 25% in one day. Spring wheat is now up more than fourfold and outpacing all commodities by a country mile.

And everyone from consumers to bakers are paying top dollar in 2008 for bread and other baked goods. Suppliers are hiking their prices and distributors are ratcheting up their charges to protect shrinking margins.

Grain prices on the bakery shelf

In Montreal, my bakery has posted signs next to the cash register to explain why they’re raising bread prices. The shop has increased its prices on several occasions since December because of soaring input costs. Whole wheat, sourdough, rye, pumpernickel, baguette, and all other types of bread now fetch their highest prices in more than 20 years. Read on to learn how you can profit from the bread basket boom.

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