January 17, 2008

US wheat and rapeseed hit new highs

US wheat and rapeseed prices are reaching new highs, buoyed by the latest ethanol laws imposed by the government.

Overnight wheat has traded at US$415 a tonne on the international market, with rapeseed hitting more than US$700 a tonne.

Ron Storey, a market analyst, said the surge is due to the new US laws, making it compulsory for fuels to contain ethanol.

Storey added that grain prices are at all-time highs, may it be wheat or corn or soy.

Soy in particular has been the primary mover in the last month driven partly by the US energy bill which mandated a level of ethanol and biodiesel into US fuel supplies from 2008 to 2022, according to Storey.