Wheat outlook

Discussion in 'Commodity Futures' started by drsteph, Sep 3, 2009.

  1. Hey there - any wheat traders with any experience have an opinion on wheat for the next 3 -6 months? Aside from downtrend and potential support at 450ish (if it doesn't just go to 300) any seasonal or common cyclical factors that tend to predominate in this market at this time? I don't punt too often in the Ags.

    Just looking for a discussion to make me consider things I might not be considering...
  2. 1) Wheat tends to make a seasonal bottom by the end of August. Whether that is random or rooted in "fundamentals", I don't know nor care.
    2) It's tough to get bullish on wheat for 3-6 months when the price is above $4/bushel.
    3) Cooler summers portend snowier winters. Interpret that however you want. :cool:
  3. kanellop


    Hello from the far away Athens City, Greece.

    With my opinion the next 3-6 Months you must watch the Wheat and also some other Factors that play a significant Role in their Price.

    A little minutes ago i make a small watch to the Currencies of Russia, Ukraine and Kazakhstan.

    This Period lost their Value again in comparison with the USD.

    Possibly you will wonder and what care that myself,

    that trade or want to trade the Wheat?

    Care someone a lot.

    That meaning logically that the Value of Wheat must drop.

    The recent Years after the collapse of the Communism, the Eastern Countries raise significantly their Production in Wheat.

    That caught Markets from the Superior Country that export huge Quantities of this Strategic Good, USA.

    Also Russia the recent Period give Money Amounts for to Export Russian Wheat.

    So, someone must watch and Countries New Rules too.

    But they are not only these.

    Someone must watch the Weather in the Crop Areas that exist the Crops of Wheat too.

    Weather affect a lot the Crops.

    Another Factor that play a Role too, are the Ocean Freight Rates.

    Regular, the Global Grain Trade is going via the Seas.

    What means that to someone?

    Let me give an Example.

    Based in the last GMR Plus Report and the last Ocean Freight Rates Report, of the International Grains Council, the FOB Wheat Price of:

    US No 2 SRW (ord) (Gulf) is 161 USD FOB per Ton

    and for the: Black Sea Milling is 160 USD FOB per Ton.

    Now, add that Amount to the Last International Grains Council Ocean Freight Rates Report and you will have in Total Cost:

    Total Cost for to buy from the Black Sea Milling Wheat, the:

    Spain-Mediterranean is 186 USD
    Pakistan is 193 USD
    Egypt -Alexandia is 183 USD
    Marocco(Casablanca) is 186 USD
    Tunisia is 187 USD

    Total Cost for to buy from the Gulf, the US No 2 SRW (ord) Wheat, the:

    Spain-Mediterranean is 194 USD
    Pakistan is 210 USD
    Egypt -Alexandia is 204 USD
    Marocco(Casablanca) is 199 USD
    Tunisia is 202 USD

    that the Price of Gulf US No 2 SRW (ord) Wheat,
    theoriticaly must drop at least minimum 5%-10%,
    (if the Freight Rates remain steady),
    for to be more competitive to the Black Sea Milling Wheat in the above destinations.

    It is not easy the game to Wheat and also to the Agricultural Goods.

    Someone must calculate together many Factors and if suppose that do that,

    does not exist a Guarantee that will make a Profit in the Agricultural Futures Markets.

    The regular is, to lost huge Amounts of Money.

    As last thing i want to write the following that i find in the Book,

    Merchants of Grain, The Viking Press, of the Author Dan Morgan.

    In the beginning of the Book exist:

    It was the Wheat, the Wheat! It was on the move again.
    From the farms of Illinois and Iowa, from the ranches of
    Kansas and Nebraska, from all the reaches of the Middle
    West, the Wheat, like a tidal wave, was rising, rising. Al-
    mighty, blood-brother to the earthquake, coeval with the
    volcano and the whirlwind, that gigantic world force, that
    colossal billow, Nourisher of the Nations, was swelling and

    -FRANK NORRIS, The Pit

    Kind Regards,

    George Kanellopoulos.
  4. we should start seeing at least a short term pop in all 3 wheats as we start gettting through the spring wheat harvest. As is typical though, I'd expect the KC board to outperform either Chicago or Mnpls, and Mnpls to outperform Chi.

    I'm also liking any of the wheat markets spread against corn down here.

    On the cash front....if you've got decent quality wheat to sell, you've got the gold right now, as a lot of the HRS and soft spring wheats are coming in at lower protein levels, which is understandable given the near perfect conditions for wheat to really stretch the heads and grain this year...which equates to more yield but generally lower protein %
  5. Some of the KC:Chi spreads are getting pretty attractive imo, it is tough to be bullish wheat right now with the extremely strong carry in the spreads.
  6. how much of this is related to DB having to reduce their AG exposure vs the weather fundamentals and or quant tech models
    used by the "clueless" to buy or sell because of some predetermined price level ?

    heck wheat is even being regarded as NATTY's long lost cousin

    at these prices

    pity the american farmer


  7. Thanks to everyone who put forth an opinion. All points to consider. IMHO price action just feels awfully bearish, particularly since dollar regression & gold run up hasn't helped this to find ANY support.
  8. Just a ton of wheat everywhere, I suppose that 22.00 MGE, 13.00 KCBT, and 13.00 CBOT prices will do that to ya :) But like I said in some prior posts some interesting spread ideas look like they might be developing in the next few months with the Wheat.
  9. According to the COT data, large commercial traders are more long wheat than they have been in over 4 years, which is extremely bullish. Seasonally, wheat goes up toward the end of September into mid-October. Wheat is also at its lowest price in over 40 years, which is always comforting when waiting for a low to form. However, wheat is currently in a strong downtrend.

    A trendline break with a close above 4.75, ideally with some bullish divergence, would be an early entry and a higher low would be a screaming buy.
  10. What? :confused:
    #10     Sep 9, 2009