For families that drive at least a combined 34,500 miles (55,520 km)  in cars that get average fuel efficiency, the MicroFueler will pay for itself in less than two years if gasoline prices stay near record levels, says Tom Quinn, the company's CEO and financial backer.

E-Fuels says it will link buyers to cheap supplies of sugar, such as inedible surplus sweetener from Mexico, and launch a carbon credit system to cut the feedstock cost of regular table sugar.

"This paradigm shift is not going to work unless we can knock out of the ballpark the cost of feedstock," Quinn said at the unveiling of the MicroFueler in New York. He said the credits could knock down the cost of fueling up to less than $1 per gallon (3.8 liters).

 E-Fuel says the unit will start shipping late this year.

Interesting product, but will it help ease motor fuel prices or fade the black eye corn-made ethanol has gotten for helping to push up grain and food prices? "This could be fun for tinkerers, but unfortunately it's not a quick solution for our problems," said Nathanael Greene, a resource specialist at green group the Natural Resources Defense Council.

What do you think? Pricey gadget or fount of bargain fuel?  

The price of diesel has shot up nearly 50 percent since a year ago to $4.27 a gallon, touching off a rash of minor protests by U.S. long-haul truckers in recent weeks.

By comparison, gasoline prices have risen only about 21 percent since a year ago to a relatively modest price of $3.67 a gallon on average, according to the daily price survey from the AAA.

The price of both key fuels has been tracking the soaring cost of crude — which is up sixfold since 2002 because of increasing demand from China and other developing countries.

But why would diesel rise so much faster than gasoline?

One theory is that worsening electricity supply problems in countries like China, South Africa, Chile, Argentina, and parts of the Middle East has increased demand for middle distillates like diesel for use in temporary power generators.

Whatever the cause, the increase in world demand for diesel has boosted U.S. fuel exports to their highest since 1991 and helped push U.S. distillate supplies to 3 percent below a year ago, according to the most recent data from the U.S. Energy Information Administration.

U.S. gasoline supplies, meanwhile, are running at a surplus.

“It all depends on June,” said the 67-year-old Shields, who has been farming near Lindsborg, Kansas, more than 40 years.

If hot and dry weather settles into the U.S. Heartland as the newly emerging hard red winter wheat crop moves into the crucial grain filling period of development, kernels will likely shrivel and yield potential could shrink. But if mild conditions continue, the new crop could be a bin buster.

The crop is maturing later than normal this year with a more shallow root system due to late planting and a cooler-than-normal, wet spring, factors that have left the wheat crop more vulnerable than typical to the whims of weather.
“You get some 100-degree days … you’ll lose bushels and test weight will probably go down,” said Bob Bennett, Kansas State University grain quality specialist.

Efforts to determine the production potential for the new U.S. winter wheat crop, in particular the crop in top U.S. producer Kansas, is a near-obsession this season with an assortment of food industry players, from farmers to bakers, and export merchandisers to Mexican millers. Record wheat prices and short stocks around the world have generated high interest in this year’s wheat crop.

A group of more than 60 such industry representatives were taking part this week in a survey of hundreds of Kansas wheat fields as part of a Wheat Quality Council crop tour.

The tour will culminate on Thursday when participants come up with an estimated average yield and production tally for this year’s Kansas winter wheat crop.

A year ago at this time, the crop was looking very healthy, aside from some pockets of freeze-damaged fields. But high hopes were dashed when late-season heavy rains washed out many fields. So this year, even though the crop appears mostly healthy, with the potential for good production, few are willing to start counting on the bushels yet.

“We are a long way from getting this crop into the bin,” said ADM wheat quality specialist Dave Green.

The U.S. government will issue its first winter wheat production estimate on Friday.

Gold’s oil-buying power is at its lowest in three years. (The chart shows the price of oil rising relative to the price of gold.) Hedge funds and other traders who play the gold/oil spread could be taking profits. Otherwise, this is hard to explain, since gold is considered a leading indicator of inflation.

In the past two weeks, crude oil prices rose to a record near $120 a barrel, while the spot price of gold fell from around $950 to $870 an ounce. Today an ounce of gold buys 7.65 barrels of oil. When gold was near $1,000 an ounce earlier this year, an ounce bought more than 10 barrels of oil. Gold’s weakest point relative to oil was in 2005 around 6 barrels.

Is the underperformance signalling that inflation expectations are overblown? Perhaps the Fed knows something … it cut a key interest rate another quarter percentage point on Wednesday and said it expected inflation to moderate in coming quarters, as energy and commodity prices level out. “I am still not getting why gold is trading down here and crude is up there. So something’s gotta give,” said Jonathan Jossen, an independent floor trader on the COMEX gold floor.

 ”Everywhere you see, there is some story about food shortages and hoarding and tightness of supplies,” said Neauman Coleman, an analyst and rice broker in Brinkley, Arkansas.

Fears about tight world supplies of food led governments to hoard and ignited protests in places like Haiti. But food scares have even erupted in some unlikely places, including the United States, the world’s largest producer and exporter of food.

Sam’s Club, a unit of retail giant Wal-Mart, said on Wednesday it was capping sales of bulk bags of rice at four bags per customer per visit. The previous day, rival Costco Wholesale Corp said it had seen increased demand for items such as rice and flour as worried customers stocked up.

You know it’s gone over the top when movie stars and government officials, like Drew Barrymore or the new Secretary of Agriculture Ed Schafer, make appearances on the Chicago Board of Trade floor, the world’s benchmark for price discovery, trumpeting their food causes.

We live in interesting times. The days of cheap food seem to be over.

THE WEEK AHEAD

The tidal wave of price volatility will continue, analysts say.

U.S. traders are most concerned about the delay in planting corn, running about two to three weeks behind. Farmers are getting antsy as they watch another around of rains and snow move across the upper Midwest this weekend — keeping them sidelined a little longer. One forecaster is calling for snow on Sunday night in Chicago.

Farmers hope to their get corn planted by May 15. After that point, yields start to drop off 1.5 bushels per acre per day everyday the crop goes unplanted. Granted farmers can catch up quickly given the size of today’s planting equipment, but they still need a break in the weather.

Bottomline…the latest weather forecast will impact CBOT prices as much as anything else in the week ahead.

USDA will issue its weekly crop progress report on Monday afternoon. Chicago grain traders expect USDA to report corn planting 16-18 percent complete, versus the five-year average of 31 percent by late April.

All the rain is also causing the Mississippi River, the main artery for transporting grain to export terminals at the U.S. Gulf, to flood.

For soybeans, the lack of a resolution between Argentine farmers and the government over a soy export tax will underpin nearby prices. Farmers are threatening a second strike, blocking soy transportation to processing plants and export terminals, after a 30-day truce that ends May 2. Argentina is the world’s top soymeal and soyoil exporter and third-largest in soybeans.

Insiders will be watching to see if any May options were exercised over the weekend following expiration on Friday. In particular, local traders were eyeing the $5.80 strike in corn, $8 in wheat and $23.80 in rice. If traders were assigned positions over the weekend, it could add to volatility — offsetting them in futures trade on Sunday night or Monday morning.

    We saw what happened to CBOT rice prices last week when fears about tight world rice supplies led governments to hoard and ignited food riots in places like Haiti.  CBOT rice made a series of all-time highs, four straight days during the week ended April 18, climbing to over $24 a hundredweight by Friday. That was more than double its value a year ago.  

 STAY TUNE TO WEATHER FORECASTS

Daily weather forecasts and intraday updates will be key to price direction. Grain traders are growing increasingly worried about planting delays as the U.S. Midwest doesn’t seem to be able to shake out of a cool, wet pattern. 

    Corn seeding is already behind and if farmers can’t get their corn seeded by mid-May, yields can drop drastically — 1.5 bushels per acre per day for every day fields are not planted by May 15, crop specialists say. 

    Planting delay jitters helped Chicago corn prices rise to all-time highs this week, with nearly all contracts well above $6 a bushel — triple historical prices. 

    Southern farmers are also having problems planting rice in Arkansas, the top U.S. rice state. 

    So all eyes will be on the USDA weekly crop progress report to be issued Monday afternoon which will give the latest planting update. 

Other factors to watch: 

Any developments regarding talks between Argentine farmers and the government over a soy export tax. CBOT traders are awaiting for some resolution. The lack of any agreement underpins soy prices. Exports out of Argentina, the world’s top soymeal and soyoil exporter and No. 3 soybean exporter, are slowed after a three-week farmer protest over the export tax. The strike was called off for 30 days to give farmers and the government time to work out a resolution. 

Option expiration of May contracts is Friday. Given the huge amount of volume traded via CBOT options, big open interest in any strike near the May futures price level will influence price direction in the coming week. Prices tend to be attracted to the levels with big open interest.

U.S. Census Bureau will issue its monthly April crush data on Thursday. 

Commodity Futures Trading Commission meeting with U.S. grain leaders. Last but not least will be the aftermath of the CFTC meeting with the U.S. grain industry in Washington DC on Tuesday to iron out concerns about the hedging viability of CBOT agricultural contracts. 

    There promises to be lots of fireworks given the non-convergence issues (cash and futures prices not coming together at delivery locations at contract expiration) surrounding Chicago contracts. Also on the table will be the dominance of commodity funds in CBOT ag futures given the expansion of speculative position limits and more likely ahead. Insiders are doubtful of any resolutions between the grain industry and the industry’s regulator.

In fact, these are high-powered executives from some of the world’s largest copper companies, producers, buyers and sellers, and they are in Chile to do business.

“I can tell you that I plan to meet with all of my clients this week, from Antofagasta, from Codelco, from Billiton, whoever makes copper,” said one chief executive in Santiago for the annual CRU/Cesco copper week.

Watch this video uploaded to YouTube to see the monster-of-monster trucks in action.

The largest of these trucks, manufactured by Caterpillar, Komatsu of Japan and Germany’s Liebherr, can carry almost 350 tonnes. Each tire can cost up to $125,000 but they can easily be flattened by a fist-sized stone wedged in its treads.

To avoid blowing a tire, a mine might reduce the bucket load even when operating full-out to keep up with global copper demand. Light trucks will speed ahead of the big ones and radio in debris on the mine roadbed. “You get guys jumping out of vehicles throwing stones off the road,” one analyst told me.

More women are getting hired anyway and not just to drive trucks. With the copper industry booming, both tires and workers are in short supply. Copper prices are near records but so are operating costs.

Yet even in Australia, with its macho image, at one large mine, reportedly the truck drivers are 60 percent female and 40 percent male.  In the superstitious old days they said women were back luck at a mine. Today, it seems they’re a charm.

The trip downtown from the airport now takes about 25 minutes. Four years ago, before the sleek Costanera Norte freeway tunnel opened, travelers had to endure a bumpy, meandering hour-long cab ride through endless neighbourhoods. The city is sprouting new highways like Nororiente to its suburbs. Americans can feel at home, a shopping mall boasting the highest tower in Latin America, Costanera Center, is going up in the heart of Santiago’s new financial district - locals call it “Sanhattan.”