(Up, up, up- that's us at Climateer Investing)
The European Commission Thursday cleared global energy giant BP and U.K.-based food and retail group Associated British Foods (ABF.LN) to build a biofuel production plant in the U.K. The joint venture involves a total investment of around 200 million British pounds, writes Dow Jones Newswires reporter Anne Jolis. The biofuel plant will be built on BP’s existing chemicals site at Saltend, Hull, U.K. and is expected to be commissioned in 2009, BP said. The plant will convert wheat feedstock into ethanol, and will have an annual production capacity of some 420 million liters.
We have this story from Bloomberg:
Wheat futures in Chicago climbed to a record, heading for the biggest monthly gain in 34 years, as demand from importers including South Korea and India reduced global inventories.
Prices for the grain have doubled in the past year as adverse weather in Ukraine, Canada, Europe and Australia damaged crops. Global stockpiles will fall to the lowest in 26 years by May 31, according to the U.S. Department of Agriculture.
Buyers in Egypt, the world's biggest importer after Brazil, and Taiwan have also sought the grain, used for animal feed and in foods such as bread, biscuits and noodles.
``This is abnormal,'' said Park Yang Jin, business department manager at Daehan Flour Mills Co., Korea's largest milling wheat importer. ``I hope to see a correction soon.''
Wheat for December delivery rose as much as 23.25 cents, or 3 percent, to $8.0775 a bushel in electronic trading on the Chicago Board of Trade. It was at $8.0525 as of 7:10 a.m. local time. The commodity has gained 28 percent this month, the most since August 1973.
Wheat for November delivery on the Euronext.liffe exchange gained as much as 17.25 euros, or 6.8 percent, to 272 euros ($371.69) a ton in Paris, a record.
South Korean flour millers, including Daehan, bought 47,700 tons of U.S. wheat today. India received offers for 530,000 tons of wheat in a tender and will announce the result by Sept. 3. Taiwan plans to buy 46,000 tons of U.S. wheat on Sept. 5.
Japan, the world's second-largest economy, which relies on imports to meet most of its demand for wheat, resumes its weekly tender next week.
Egypt's General Authority for Supply Commodities, the main grain buyer, was still buying because ``we figured wheat futures in the coming months are going to be even more expensive,'' Deputy Chairman Nomani Nomani said yesterday.
Egypt purchased at least 1.4 million tons this month, eight times the amount a year earlier, according to government data.
A forecast more than doubling in Australia's wheat crop from last year's drought-ravaged harvest is being hampered by two months of below-average rain in most growing regions. Rain is ``critically'' needed in coming weeks to avoid crop losses, National Australia Bank Ltd. said yesterday in a report.
Australia last year produced 9.9 million tons, 61 percent less than the previous year, after drought devastated the crop, the USDA said. Australian farmers will produce 23 million tons this year, the department said.
U.S. exporters sold 1.232 million tons last week, up 17 percent from the previous week, the USDA said yesterday. Overseas orders for U.S. wheat from June 1 through Aug. 23 are up 95 percent. Wheat, valued at $7.7 billion in 2006, was the fourth-biggest U.S. crop, behind corn, soybeans and hay.
``I think the U.S. is the only country which can meet demand at the moment,'' even with recent sales by Russia to Egypt, said Takaki Shigemoto, an analyst at broker Okachi & Co.
``The market now appears to be extremely overbought,'' Shigemoto said. ``When there is a technical correction, this may be a good opportunity for importers as the current bullish market has been driven by physical demand.''...MORE