Wheat prices rallied to record highs today, rising above $12 a bushel for the first time on record in Chicago as investors piled into the agricultural commodity on signs demand is outpacing supply.

Wheat for May delivery climbed 90 cents to $12.145 a bushel in after-hours Monday night trading on the Chicago Board of Trade, the grain's biggest one-day jump in five years. By the middle of Tuesday's trading session, prices had retreated to around $11.94 a bushel.

The steep wheat price gains are being driven, in part, by a classic supply shortfall. Last year's U.S. harvest was hurt by excessive rainfall, at the same time as global crops yields in places like Australia, Canada, and the Black Sea region have suffered.

Wheat's gains are also being driven by a wave of speculators, investors seeking alternative investments at a time when the U.S. economy is slowing, the greenback is falling and financial markets are grappling with credit woes.

While wheat is among the least sexy of the commodities, its importance to society outweighs all the energies and precious metals put together. Without the availabity of abundant and easily available food we have nothing at all.

- luke