Grain Conundrums

Paul Krugman wonders this morning why food prices in general, and grain prices in particular, have spiked so dramatically:

Demand has been rising for a number of years; bio-fuels is a big thing, but how much bigger is it this year than a year or two ago? It can't be speculation: that raises prices by inducing stockpiling, and stocks of wheat and rice are at or near record lows.

Meanwhile, commenter alexr points me to an NYT article from Friday, about the way in which grain futures have been expiring at prices well above the cash price.

The futures-expiry conundrum is certainly evidence that Things Are Very Weird in the ag markets right now, and have been for a couple of years. I'm hesitant to even hazard a guess as to what might be going on, but I'd just say that one can no longer with any real certainty talk about "the price" of wheat or corn. People by convention generally mean the futures price, because that's where the liquidity is, but if you can't actually get that price in the cash market, it might be worth revisiting that convention, at least until the futures markets return to normal or move to settlement based on some cash price.