Minneapolis Wheat

Discussion in 'Ag Futures' started by Nick Leeson Jr, Jan 28, 2008.

  1. The March contract amazing - up 2.50$ (~20%) since Jan 2nd. Now at 1296, making some wheat growers and traders very happy. Anyone catch this move, or know of a Minnesota wheat grower who did?
     
  2. Wheat has finally made it into the teens!
     
  3. tns4774

    tns4774

    Glad I am not any of the 20,000 short positions in the March contract that will have zero ability to deliver if need be...this is a squeeze play for the record books. No telling where it stops...
     
  4. okwon

    okwon

    Does it ever trade or just open up limit up everyday?!

    But seriously, any idea on the fundamentals behind this move versus other wheat products?
     
  5. tns4774

    tns4774

    This is the 4th day in a row it has been limit bid at the open...not too many trades getting done.

    Any shorts are getting creamed in that market as there has been no way to get out for several days. There are currently over 23,000 contracts of open interest in March Minneapolis wheat futures, while delivery stocks are only about 13 million bushels, or 2600 contracts. That leaves over 20,000 short contracts that in no way will be able to make delivery, and now they are being punished dearly with no end in sight.

    Pretty simple-the wheat isn't there to back up the futures positions and now people are paying dearly. Spring wheat, which is traded in Minneapolis, is in the heat of the acreage battle with corn and beans. How high does Mpls wheat need to go to secure additional acres form corn and beans?? No one knows. Combine that with the squeeze play on the March contract and this will be one to remember.

    Spring wheat is the highest in protein content amoing the wheat classes and suppplies are getting very tight, with millers turning to blending more KC wheat. The market has no choice but to secure acres for next year and price is the only way to accomplish that.
     
  6. will2205

    will2205

    March Mpls traded 1377 synthetically two days ago. Although the sh*t has been locked up everyday we have been trading some serious options. It looks like we are taking a break for the past few days, but there is still no more wheat plus 20,000 shorts.
     
  7. 4774 -- Where do you find delivery stock #'s?

    DJ
     
  8. tns4774

    tns4774

  9. thinking of going heavy selling a shit ton of march puts 16 days till exp. no way this fucker is slowing down they are gonna break the shorts, any thoughts? words of wisdom or warning lol??
     
  10. 1) Do a trade that has defined-risk, not potentially unlimited risk.
    2) The exchange could declare a "liquidation only" market in order to facillitate the delivery of March-08. You'll probably be bankrupted with a short-put position that isn't far enough away.
    3) The USDA could declare an export embargo that would probably scare the hell out of all of the longs. Your short-put position would become a nightmare.
    4) Don't use market orders!
     
    #10     Feb 5, 2008