Marc Chandler submits:In a time when there is much discussion of peak oil and the idea that other commodities are less abundant or more costly to access, one issue that might not get enough attention among investors is the shortage of water. Some political scientists, for example, have suggested that the next war in the Middle East may be over water, not oil. Grain is very water-intensive. Roughly speaking, it takes 1,000 tons (100 cubic meters) to grow a ton of grain.
Chris Damas submits:
I have a small news clipping saved on my desk (from the AFP newswire) about the Russian drought. It’s dated July 11, 2010 and I plan to paste it to my forehead this weekend. Because I didn’t pay enough attention to it. The small clipping has became a big story over the past 2 days.
Projected inventories of wheat and canola before this year’s harvest topped forecasts by analysts in Canada, one of the world’s top grain exporters and the biggest producer of the oilseed.
Wheat stockpiles will fall 32 per cent to 7.11 million metric tons by July 31, and canola reserves will slump 23 per cent to 2.32 million tons, Statistics Canada said Thursday in a report on its website. The average estimates of six analysts surveyed by Bloomberg News were 6.44 million for the grain and 1.38 million for the oilseed.
Ken and Brian Vandeburgt have never seen corn so short on their dairy farm near Dewdney, B.C. “Typically we have 12-foot high corn,” Ken says. “This year it’s really short. It looks like Saskatchewan corn.”
The brothers also just finished the third of five cuts of their hay, but the fields are so dry that “the diesel that we burnt was worth more than the feed that we cut.”
MUCH of America's agricultural heartland is in the grips of extreme to exceptional drought. It is becoming increasingly clear that this drought will take a significant toll on some of the nation's principal food crops, especially corn, wheat, and soybeans.
By Paulo Santos:Along with corn (CORN), wheat (WEAT) has been on a tear. One might think that the hot, dry June weather was to blame, that the wheat was wilting in the fields. But there's just one problem ...
Yu Ruicheng's weathered face creases with worry as she stands on her dry wheat field in eastern China, where a record drought is threatening to send soaring global food prices even higher."If it doesn't rain next month, we won't harvest anything," the 62-year-old farmer says, crouching down and sifting parched soil through her fingers, pointing to dried-up wheat shoots scattered across her plot of land.