Winter Wheat Woes.

Discussion in 'Commodity Futures' started by kanellop, Mar 8, 2013.

  1. kanellop


    Hello Again.

    I have find this hour the following News:

    Winter Wheat Woes .

    Continue "Shorties" to go Short to Wheat.

    We will see who will win the coming time period.

    I have been tremendous angry with the current Wheat situation.

    Continues to listen for the huge quantities of Wheat that exist.

    And the good prospect for this Year Wheat Crops around the Globe.

    And i wonder:

    a) Here:$FILE/PR%20130308.pdf ,

    the Basis ( Cents per Bushel ) for March Delivery in Pacific Northwest, PNW, have go for:

    1) NS ( Northern Spring ) / DNS ( Dark Northern Spring ) 13.5 % Protein, 185 Cents per Bushel,

    2) NS ( Northern Spring ) / DNS ( Dark Northern Spring ) 14 % Protein, 190 Cents per Bushel.

    These Numbers represend that everything goes so well ?

    b) Here, into the Zhengzhou Commodity Exchange in China: ,

    the today's 08, March 2013, closing Price for the Strong Gluten Wheat WS305 is:

    2479 Yuan.

    Also, here: ,

    i see now the Exchange Rate between USD and Yuan to be:


    So, 2479 / 6.2179 = 398.68 USD per Tonne.

    And based in the Numbers of:$FILE/PR%20130308.pdf ,

    for the:

    1) NS ( Northern Spring ) / DNS ( Dark Northern Spring ) 13.5 % Protein, 185 Cents per Bushel,

    2) NS ( Northern Spring ) / DNS ( Dark Northern Spring ) 14 % Protein, 190 Cents per Bushel.

    we have for March 2013 and for the:

    1) 364 USD FOB Price + 24.50 USD ( Ocean Freight Rate from Pacific Northwest, PNW, to China ) = 388.50 USD,

    2) 366 USD FOB Price + 24.50 USD ( Ocean Freight Rate from Pacific Northwest, PNW, to China ) = 390.50 USD.

    So, the Best Classes of U.S.A Wheat are more cheaper for to import it China with the adequate Wheat supplies...

    I do not want to make any other Comments for now.

    Kind Regards,

    George Kanellopoulos.
  2. lx008


    For people trade with USDA balance sheets, wheat is still most likely in big surplus in the grain complex.Trader don't want to short soybean with such a low ending stock,and if people trade the spread the further months are even weaker, I guess.
  3. Brighton



    Are you involved in the cash (physical) grain trade? I ask because although that weekly summary from US Wheat Associates is helpful in learning about the markets and getting a general understanding of port-by-port competitiveness (and to a lesser degree the arbitrage that occurs), it has its limitations for a speculator.

    If you're angry/frustrated because it seems like US wheat should be higher-priced on the exchanges and getting a larger share of global exports, here are a few things that might be muddying your calculations:

    1. China imports of wheat from the US pale in significance to their soy and corn activity, so don't look to them as the reason for the weak wheat market, even if it looks like US wheat should be moving there.

    2. There's a lot of "stuff" going on in the PNW (Pacific Northwest) freight market now. Shipments of Bakken oil by rail are causing congestion and there were threatened dockworker stoppages. Looking at a basis number FOB PNW vessel that looks historically high or low might not mean a lot unless you understand the underlying freight economics that may be having a larger than normal impact. Same goes for the FOB US Gulf numbers when the Mississippi River was at critically low stages recently.

    3. India wheat production and exports. That's a relatively new story compared to a couple of years ago. Same goes for the ongoing improvement in production - and slight improvement in infrastructure and reliability - from the Ukraine and Russia.

    4. Nearby wheat is cheaper than nearby corn. That's rare, but not unheard of. Draw a spread chart that goes back at least five years and preferably ten. The nearby wheat contract was at parity with corn for a relatively long period within the last couple of years.

    5. Even with all the uncertainty about the lingering drought, the Southwest US wheat harvest will be here in a couple of months. That can change market sentiment a lot. It's analogous to late August in the corn or bean markets. It might still be hot and dry, and farmers will complain that the knuckleheads in Chicago don't know what's going on, but in most years the market will have seen its highs by the end of July or early August.

    I could go on and on. It's the old debate about fundamental trading - there are so many factors and it's a challenge to know what's important at x point in time. Some people throw up their hands and go the technical analysis route.

    My unsolicited advice if you are speculating and primarily using fundamentals: Spend more time on supply & demand reports, the two weekly export reports, the crop condition and progress report, intra- and intermarket spreads and maybe COT analysis. I would downplay (don't second guess) basis levels in the interior or at export points because the commercials are going to quickly arbitrage the anomalies away.
  4. kanellop


    Hello Again, Brighton.

    Thank you for your Comments.

    I hope and i wish to be well.

    First, i can say that i want it to listen your Opinion in the deep of my mind and that happen...!

    The basic reason that i want it to listen your Opinion,

    is because, as i have seen relative with your EliteTrader Name,

    you are located in a Place into U.S.A that have affect me a huge.

    That is Minnesota.

    And especially, Minneapolis.

    The reason is obvious.

    I believe that you understand it very well.

    Now, very fast i have to tell you that i do not involved in the physical Wheat trading.

    Basically, i involved to trade Futures Contracts alone,

    especially Futures Contacts to Wheat and Corn in this time period of my life.

    I do not trade for anyone except of my self.

    In this point, i believe that is not possible to give you some more details,

    relative to your Comments,

    because need some Data for to do this and i do not have it right now.

    Also, i am too tired because:

    a) of my trades in the last week,

    b) i have very bad mood this hour,

    and i do not want to write now so many things.

    With my small opinion,

    missing from the Grains Markets,

    at least for Wheat 2 more things.

    One of them exist into the Minneapolis Grain Exchange ( MGEX ),

    but have not attract any serious trading.

    That are the Wheat Indices.

    These Indices are very important.

    Represend Elevators Wheat Prices and i believe that worth a lot.

    I have spent some time to discuss this Issue with telephone calls,

    with Mr. Joe Albrecht of the Minneapolis Grain Exchange ( MGEX ).

    If you are around there,

    i believe that you know him.

    Now, another thing that will help me a lot to my Wheat trading and missing,

    are Futures Contracts in Wheat FOB Prices especially in U.S.A Gulf and Pacific Northwest, PNW.

    If had these abilities possibly,

    i will understand better some Fundamental Trends in Wheat.

    For the Ocean Freight Rates i will not speak you now,

    because is another big story.

    I will be interest to learn,

    especially from curiocity,

    if you own a Seat into the Minneapolis Grain Exchange ( MGEX ),

    or you work for any big Multinational Grains Company.

    That's for now.

    Kind Regards,

    George Kanellopoulos.
  5. Brighton



    I don't want this to come across as flippant, but if you're a speculator I don't know why you're concentrating on the MGEX and its grain index contracts.

    The MGEX has one viable contract - HRS wheat. The index contracts you referred to garnered some press attention a decade ago, but as you can see in the tally below, they haven't had a single trade in nearly five years. Maybe some commercials or analysts use the index data, but as a trading vehicle, they were pretty much dead on arrival.

    Regarding your question in a previous post, there are plenty of free data sources for grain values (cash price and/or basis) delivered to the primary export locations:

    - barges to the Gulf, often referred to as CIF Gulf or CIF NOLA (New Orleans, LA area)
    - barges to Portland, OR. FYI, Columbia River barges have 2x the capacity of Mississippi River barges (3000-3100 short tons v. 1500)
    - trains to the PNW (Portland, Seattle, Tacoma and Vancouver, WA)
    - trucks and trains to Houston
    - trucks and maybe trains to Duluth, MN and Maumee (Toledo), OH

    Obtaining information on FOB vessel values (the price offered to a foreign buyer) is more difficult. A foreign buyer may wish to telegraph to the market what he just paid or he may be required to if he works for a state grain-buying agency, but in general, these values are hard to come by. If you subscribe to a high end data service like Reuters Eikon or Bloomberg, they might have FOB information, but unless things have changed since I was in the business, it's going to be an indication - an incomplete data set with a broad range.

    P.S. I used to work for Cargill but I've never owned a seat on the MGE. They denied my membership application because I wanted to pit-trade in my Batman pajamas, just like I do from home.
  6. kanellop


    Hello Again, Brighton.

    I decide to write some more words this hour.

    This weekend i spent it to walking a lot,

    to studied some News,

    and to thinking a huge.

    I will begin from here: .

    I studied a lot this Article.

    Possibly, is one from the best Articles relative to Grains that i have ever read.

    Now, and based to my studies,

    i had find these News: .

    Into there,

    for the very important to Hard Red Winter Wheat U.S.A State of Kansas,

    exist the following Numbers for the Hard Red Winter Wheat Condition,

    for the Week Ending 3, March 2013:

    a) 12% Very Poor,

    b) 23% Poor,

    c) 41% Fair,

    d) 23% Good,

    e) 1% Excellent.

    So, based in Mr. Darin Newsom, DTN Winter Wheat Condition Index,

    we have:

    3 + 46 + 41 + ( -23 ) + ( -24 ) = 43.

    The conclusions are yours.

    Now, i had find and the following very important Article:

    Summer drought may clobber the midwest .

    Into there, someone with a little try,

    will go here: .

    Inside there,

    will find with my small opinion rare Informations.

    Again, the conclusions are yours.

    Now, let me go to my experience in the trading of the Spread:

    Long CBOT Wheat / Short CBOT Corn.

    I started to trade it from 50 Pips ( Wheat above Corn ) until to -7 Pips.

    I trade the Scenario that the Wheat will raise even more in comparison to Corn from 50 Pips.

    It is a miracle that gone with a total loss, maybe, around in 2000 USD ( Excluding Broker Commissions ).

    The -7 Pips occurs a little days ago.

    I decided it to stop to trade it for now.

    My final conclusion to that,

    is that,

    Corn in U.S.A are in very serious troubles.

    It is impossible the Cash Price of Corn to be so strong in comparison to Futures Contracts Price.

    Also, it is not possible to exist so strong Prices in RIN's.

    My opinion is this:

    The Numbers of USDA relative to Corn are wrong.

    The "Alan Greenspan" of USDA, Joseph Glauber,

    have wrong Numbers or "manipulate" the Numbers.

    And to continue to that,

    i am saying that,

    because i "feel" that trying as hard,

    to appears in current USDA Reports Futures Corn Numbers.

    But, i repeat but,

    if exist New Problems in the New Year U.S.A Corn Crop,

    then will be a Disaster.

    And that, will be happen because will appears the correct Numbers...

    It is not possible for ever to hide things.

    And then, even a caught to the Ethanol Mandate will not save the things.

    So, the Old Corn Crop Price Numbers possibly will raise a lot into the CBOT.

    Also, someone must be very sceptical to be so much Short it in the New Year U.S.A Corn Crop.

    Kind Regards,

    George Kanellopoulos.
  7. Brighton


    Sorry to hear about the trade gone wrong. A $2850 USD loss is a hard and expensive lesson. If it's any consolation, I bet most traders (yours truly included) have had larger single-contract losses sometime in their career, so consider it a badge of honor.

    Spreads can take forever to work (or go against you), but when they do, watch out! It seems everybody and their brother has bull spread May-July corn, soybeans and soymeal in the last couple of weeks and since you were long May wheat and short May corn, some of that bull spreading hurt you. Also, per the articles you linked to, the sentiment has changed in wheat due to the calendar and the recent precipitation.

    All that said, corn and beans could still be explosive this year and HRW wheat could come back if it doesn't continue to receive moisture.

    As for old crop corn, remember, the basis and the spreads are doing some of the work of the board right now to get grain moving (or at least that's what the analysts say). As for new crop, it's a long way off but it's either going to be ~$4 or >$6. It all depends on the rain.

    I don't follow beans that much. They have higher margins and lower option volatility than corn and wheat. The latter situation is perplexing because for a couple of years beans have had the tightest stocks situation.
  8. kanellop


    Hello Again, Brighton.

    Basically, i did not trade only one Spread.

    Make several Spread trades into the Pips Field that i mention.

    From all these trades i had about a total loss of 2000 USD ( Excluding Broker Commissions ).

    I believe that based in these trades,

    it is a miracle that i had so little USD losses.

    Now, this hour i am consider the Wheat.

    I am thinking the Chinese,

    the Hard Red Spring Wheat of Minneapolis,

    and the Hard Red Winter Wheat of Kansas.

    Also, the Basis Numbers in Pacific Northwest, PNW,

    for Northern Spring / Dark Northern Spring,

    meaning a lot of things to me.

    It is very big the Basis ( Cents per Bushel ) over there.

    These represend possibly very big Demand.

    Can put it out from my mind this.

    Now, FOB Export Values someone can find.

    Also, Ocean Freight Rates can find.

    But, can not find the trade Numbers that occurs in a specific time period, i believe.

    Even with PIERS: ,

    Bills of Lading Data can not cover.

    Even with the Official Sales announcements.

    Also, Ships that transfer the True Gold ( Wheat ) have a System that have the Name AIS.

    Exist, a Company that can watch the moves of the Ships:

    IHS Fairplay: .

    But, my problem is to how,

    i will know that transfer the Ships the True Gold ( Wheat ) inside.

    That missing.

    Do not say also,

    for the Cost of the Subscriptions to these Companies for the above things...

    I am sure that this Giant Multinational Company with the Name Cargill,

    have an enormous Advantage to all these.

    Best Regards,

    George Kanellopoulos.
  9. Brighton


    Everything from IHS is expensive, probably beyond the reach of most individuals.

    I'm not sure what information you are trying to obtain. In the public realm you can readily find delivered export terminal basis, some FOB vessel basis/cash price reporting, USDA weekly sales reporting and USDA weekly destination reporting (the export shipment report).

    You seem to have a knack for finding free information sources on the internet so you've probably come across sites that provide indicated freight rates for various routes and charter lengths. Are you also trying to track what ships are in port and about to load? Are you trying to track them once they leave? Or are you trying to find additional terms (the specific price?) of the export sale contracts? Note: Most of these are private contracts, so I doubt that information is reported.

    As I said in a previous post, all of this fundamental research may be helpful to learn about the market and it could be you just enjoy reading about grain and shipping. I'm skeptical, though, that you're going to be able to obtain timely and affordable information about the global freight market and the particulars of export sales contracts and translate that into actionable trade ideas.

    In the freight/arbitrage/relative value realm you're competing against the largest grain companies plus the JTCs. The Japanese trading companies - Marubeni, Mitsui, et. al. not only own a couple of PNW export terminals but trade a LOT of the export cargoes from that region.

    Put a little more bluntly, the operators/traders in the PNW are giant companies, this is their core business and they've been doing it for 150 years or more. It's an overused phrase on this site, but where is your edge coming from?

    If you're convinced the basis is strong and telegraphing good and growing demand, that futures prices are too low and that the Chinese are going to swoop in and buy a lot of "cheap" HRS wheat, why not just buy HRS futures or call options?
  10. kanellop


    Hello Again, Brighton.

    Quite late, i believe,

    i will try to answer to your last Comments.

    Reasons are basically some tremendous negative things that happened to me the last time period,

    exactly after the Event of Cyprus from the damn bastards of EU.

    That Event almost "kill" me,

    create to me heavy USD losses and the lost of all my Long Wheat Positions that create them after huge personal work.

    But, i do not know,

    i believe that maybe,

    finally will exist a punishment to them.

    I am trying to watch very close the Good that you already know.

    Based in my Informations,

    Germans try to collect as many Gold and also to collect Money that does not belong to them from as many EU Countries.

    One Country, is my Country.

    As also i know,

    the first World War lost it the Germans,

    because except of anything else,

    didn't have Food to eat.

    Also, in a Major Battle for them in the second World War,

    the Battle of Stalingrand,

    the daily Ration to their Soldiers to the Good that you know that i follow,

    gone from the 200 grams per day to the 100 grams per day and then...,

    to nothing...

    And i wonder,

    if exist something like a New Global War,

    anytime soon,

    what will happen to the guys that collect Gold like the Germans,

    when the EU Wheat Reserves are in Multi -Years low.

    Now, you said:


    Are you also trying to track what ships are in port and about to load?

    Are you trying to track them once they leave?

    Or are you trying to find additional terms (the specific price?) of the export sale contracts?


    These are correct.

    With the AIS System can watch someone the Ships in which Ports go to Load or to Unload,

    the Grains.

    But is not enough that.

    Now, basically does not care me any from the Companies that you mention except of One.

    That is my passionate Company.

    Here someone can find: ,


    Robert Bergland, former secretary of agriculture, told the Minneapolis Star and Tribune that "they probably have the best crop-marketing intelligence available anywhere, and that includes the CIA."

    Speaks for your Company.

    I know it very well.

    Always, involved it in the Grains Trading.

    In the Goods that always and every day eat the People and the Animals.

    It is not stupid.

    Does not care it,

    the Gold Trading,

    the Crude Oil Trading,

    the Currency Trading,

    but cares it the Grains Trading.

    For example:

    Saudis have Crude Oil but have Grains to eat ?

    Chinese export huge Number of Goods but import a huge Number of Grains Quantities.

    That Company, Cargill,

    which also i respect it too much,

    started back in 1865 from Conover, Iowa.

    A very important U.S.A State.

    Now, basically, except of anything else,

    i have 2 Major Disadvantages relative to Cargill.

    Not my self but anyone else, i believe.

    1) Can make Deals without to announce these Deals.

    2) Can load the Ships that transfer the Grains,

    without anyone else to knows,

    what Grains and in which Quantities have these Ships inside.

    So, based on that,

    knows very well the Grains Flows that noone else know it.

    I believe someone if calls the:

    1) Director of CIA,

    2) U.S.A Secretary of Agriculture,

    3) President of the U.S.A,

    4) "Alan Greenspan" of USDA, Joseph Glauber,

    5) Any other President of any Country in this World,

    and ask from them,

    to answer if knows the above Number 2) Issue,

    i believe that will Answer: No.

    Now, i know very well that Cargill is involved with the Minneapolis Grain Exchange ( MGEX ).

    There trade it the Best Quality Wheat of the World until now.

    The Hard Red Spring Wheat or the Northern Spring or the Dark Northern Spring.

    It is the Good that i do not have possibly,

    passion and psychosis with.

    I believe that i have and a paranoia with it.

    I am a small trader with tremendous love in the Wheat.

    Work for my own.

    Now, does not care me what will do finally the Chinese.

    I wish them to do not ever have any trouble to their Wheat Crop.

    I wish the same for any other Country or Region.

    To do not have ever any trouble/s with their Wheat Crop.

    Remember very well these words from me...

    Otherwise, will have to confront the hell in their Country/ies.

    Kind Regards,

    George Kanellopoulos.
    #10     May 7, 2013