Wheat curve

Discussion in 'Commodity Futures' started by TraDaToR, Jul 19, 2012.

  1. TraDaToR


    The Chicago wheat curve has been shocked by the recent drought.

    At first most expiries skyrocketed, following the general trend in agriculture, fueled by the poorer and poorer condition of the current crops. But last week, the first 2014 crop month, july 14, started to fall compared to the 12 and 13' crop months.

    It made sense since I don't know how a drought in 2012 can affect the 2014 crop. This WE, I thought that by extension I don't know why the current drought would affect the 2013 crop and I placed limit orders to short Jul 13 vs Dec12. Unfortunately I wasn't filled. Now 2013 crop months are much lower than 2012 months...

    Any thought on trades??? There must be something to do there.

  2. kanellop


    Hello Again.

    It is very very early for to wonder for the Year 2014.

    Right now we are in July 2012.

    Until there, will happen significant things i guess.

    Now, for Trades relative to Wheat...

    It is very difficult someone to get Long in Wheat right now.

    I know that will exist huge Volatility.

    For Shorting Wheat i do not speak at all,

    because it is not inside my nature that.

    By my Side,

    a little time earlier today,

    i get Long in a Wheat Spread.

    Long to Kansas City Wheat March 2013 / Short to Chicago March 2013.

    That Spread as i check it yesterday,

    have not raise so much in comparison with the Spread:

    Long to Kansas City Wheat May 2013 / Short to Chicago May 2013.

    Another thing that watch closely for a possibly exit,

    to both of them,

    is the HRWI Index versus SRWI Index in the Minneapolis Grain Exchange ( MGEX ).

    Usually, abstract them and make my conclusions.

    Right now the July 2012 Spread based on that Spread HRWI Index - SRWI Index is:

    -24.12 based on the Close of the Day 07/18/2012.

    I believe,

    if that start to raise and goes in a first move to 0 and then to a positive number,

    will help my Long Wheat Spreads.

    Kind Regards,

    George Kanellopoulos.
  3. TraDaToR


    Hello George,

    I don't get Minny and KC wheat on IB so I don't know...

    On Chi Wheat, I am actually long Jul14/Short May14 @ 73 3/4, betting on a narrower spread, but it's super illiquid so I just took 1 lot to see.
  4. Awesome option trades here.-Some might think it would be illegal! :wtf:
  5. TraDaToR


    Please tell...:cool:
  6. kanellop


    Hello Again.

    As are the things right now,

    consider a little to open Account/s to a reliable Brokerage Firm/s that cover trading into the Kansas Ciry Board of Trade ( KCBT ) and Minneapols Grain Exchange ( MGEX ).

    Now, consider a little for trading the Minneapolis Wheat in the Months of March 2013 until July 2013.

    The basic Reason is because,

    is a top Quality Wheat.

    With Major Weather Problems in many Wheat Producing Countries,

    anytime soon,

    i believe that this Quality Wheat will get the attention that worth.

    Now, some other Reasons for to trade this Quality Wheat or simple the Wheat,

    is the serious possibilty and serious concern,

    that the tremendous USA Drought will continue into Fall,

    at least for the Major Winter Wheat USA States of Kansas, Colorado, Oklahoma and Texas,

    where is the Planting Winter Wheat Period.

    That will affect i believe a huge the coming USA Winter Wheat Crop of 2012-2013.

    Now today,

    i have learn from the News that the USA State of Oklahoma have Fires and very high Temperatures.

    Right now the USA States that i mention above have enormous Drought Conditions:

    http://www.droughtmonitor.unl.edu/ ,

    in their Winter Wheat Crop Areas.

    Now, some other Reasons for a possible trading to it,

    are here:

    http://www.mgex.com/market_commentary.html ,

    and more especially:

    1) http://www.mgex.com/documents/071912.pdf ,

    2) http://www.mgex.com/documents/072612.pdf ,

    3) http://www.mgex.com/documents/080212.pdf .

    Consider also,

    for a possible trading in some Wheat Spreads.

    These are here for to see it for Free:

    http://www.mrci.com/kcbt/kw/spdstat.php .

    To me here likes me,

    the Number 49 first and the Number 48 second,

    but does not means anything that to you.

    Also, you can create for Free some Spreads here:

    http://www.mgex.com/charts.html?page=mspreads .

    Also, consider for any possible Entry/ies to the above things that mention,

    after the 10th August USDA WASDE Report,

    where you will have more clearly an Icon for the current Grains conditions from the Eyes of USDA.

    I hope all these to help you even more to your Decissions...

    Best Regards,

    George Kanellopoulos.
  7. Just short 2013 or 2014 Wheat futures. Better yet, use options - sell Oct. puts and buy 2013 puts.

    Obviously the only reason they are where they are is because of the current drought, which as you point out is not a good reason.
  8. kanellop


    Hello Again.

    ( Especially Attention to TraDaTor. )

    For to clarify something...

    I mean to my previous Message to consider to be Long in Minneapolis Wheat of March 2013 until July 2013 and in the Wheat Spreads to be:

    1) Long Kansas City ( KCBT ) Wheat March 2013 / Short Chicago Board of Trade ( CBOT ) Wheat March 2013,

    2) Long Kansas City ( KCBT ) Wheat May 2013 / Short Chicago Board of Trade ( CBOT ) Wheat May 2013.

    Best Regards,

    George Kanellopoulos.
  9. here's a stupid trade we use to put on, but i doubt it will work this year

    wait until July Wheat is low, and then go long some time in December

    the idea is, there is no such thing as good winter weather for wheat, so that can't hurt you, but there can be a bad blizzard that can be considered bad for winter wheat and that can help you

    win lose or draw close out in the spring

    I'll have to go back and see how it worked in 89

    actually I don't know how many times it ever works, but it worked one bad winter, and everybody put it on ever since
  10. By the way I looked at Soy and Corn and, unlike Wheat, they have not yet started to come down much in the deferred months, although the deferred months never rose as much as the close months either.
    #10     Aug 5, 2012