Wheat has plunged for a second day coming off  its 23-month high as some of the panic that had gripped the wheat market subsided. Severe drought and wildfires in Russia, the world’s largest wheat producer, have destroyed a fifth of the country’s crop and sent prices soaring. Since the end of June wheat prices have more than doubled. The dry weather has extended to hit neighboring countries, Kazakhstan and Ukraine, both big wheat producers. In fact, Russia announced that it was banning grain export for the period from August 15th through December 31st. Meanwhile in Canada, the unusual wet weather has prevented seeding and destroyed crops. On Wednesday August 4th, the UN’s Food and Agriculture Organization cut its forecast for 2010 global wheat production by 5m tones, to 651m tones. Premier Foods, one of Britain’s biggest food companies and the owner of Hovis, said the price of a loaf of bread will have to rise, by possibly as much as 10p. Thus sending the price of a loaf, one of the very few staples families buy everyday of the week, to hit a record of £1.29, higher than the £1.27 record in the summer of 2008.

Orange juice futures rose to the highest level in 15 weeks as hurricanes threaten to damage citrus harvest this season in Florida while coffee prices hit a 13-year high, are a result of poor harvests. J.M. Smucker Company, producer of Folgers, Dunkin’ Donuts and Millstone coffee has increased the prices of its coffee products sold in the US by an average of 9 percent.

All taken together, the raw ingredients for breakfast have increased in price by 25% since the beginning of June. It’s good that we’re going into the Holy month of Ramadhan, or else we would end up paying the increased cost.

What do pigs and lingerie have in common? Stop picturing a pig in lingerie because I’m definitely not going there! Well, they are both used as collateral at Russian banks! On September 15, guest contributor W.L. wrote an intriguing article about Parmesan cheese used as collateral in Italy. Although plausible, it was comprehensible. But pigs? Lingerie? That is way above and beyond!

Desperate times call for desperate measures and it seems cash-strapped Russians owing money to state-owned banks are putting forward literally anything of value to stop banks from calling and keep their life-lines on. You may think well this may be an incident or two, but it isn’t. According to Russian billionaire Alexander Lebedev of OAO National Reserve Bank, loans secured with “strange assets” make up 5 percent of his bank’s total portfolio and as much as 20 percent of loan books at the country’s biggest state banks. Again: 20%! Lets hope oil prices stay at these high levels for the sake of GCC prosperity and most importantly to stop Russians from going nude!