Wheat Prices

[malleefarmer]

You can study fundamentals world wide, follow the charts and technicals but events of the last few days really hurt farmers pockets when all commodities hard and soft gets caught in the down draft or bad world economic news.

How much pain are we likely to see cotton or charlie.
Thank goodness i priced a portion of my wheat in feb and canola in may.

Or will decreasing yields in northern hemisphere put a foor in the market soon.

[malleefarmer]

should read OF bad economic news

[cottonpicken]

This could get bad,its a perfect storm.

This is what i was talking about a while back.the
asset markets needed to be cooled off and the
paper market supported before the announcmentt
of q3.

The sell timing was easy,the re-entry timing on
this will be tough.

[charliep]

Not sure myself Malleefarmer. Will leave comments on general markets to cottonpicken/others (just as worried as everyone else here).

On wheat, a big world crop (in spite of issues in North America and western Europe) is putting pressure on prices. Former Soviet Union countries are normally aggressive sellers off the combine (need the cash) and this year is no different. This will slow as Russia, Ukraine, Kazakstan, etal get supplies sold. The other assumption is big crops in south hemisphere countries. You can comment on Australia. Argentina is also expected to have a bigger crop/be more aggressive.

Suspect the grain and oilseed market fundamentals will eventually divorce themselves from the financial markets but the risk remains. Currency fluctuations also add an element of risk (both opportunity and pain) to grain markets. Not saying much so hopefully someone else will stick their neck out more.

[charliep]

Some thoughts on the market.

[URL="http://www.agweb.com/article/utterback_expects_increased_market_volatility_/"]agweb[/URL]

[TOM4CWB]

Mallee,

Here is a good wrap up for the week from US wheat.

Looks like we came through with flying colours!!!

Highlights:

Futures traded mixed this week with the CBOT and KCBT nearbys posting gains, while the MGEX September contract fell from last week. Spillover from the strength in corn prices pushed wheat prices sharply higher early in the week. On Tuesday, the CBOT and KCBT nearbys gained 41 cents and 36 cents, respectively, while the gain in the MGEX nearby contract, which gained 15 cents, was limited by favorable weather conditions for the developing spring wheat crop. Prices fell by the week’s end, however, as concerns over the global economy and a strengthening dollar pressured prices. Overall, the CBOT September contract gained six cents from last week, closing at $6.79/bu, and the KCBT September contract gained 13 cents, to $7.80/bu. The MGEX September contract lost three cents from last Friday, closing at $8.27/bu. Corn prices were up on the week as concerns that warm temperatures would limit the crop’s yield potential supported prices. The CBOT September corn contract reached the daily maximum limit on Tuesday, closing 30 cents higher, and closed on Friday at $6.93/bu, up 27 cents from a week ago. The CBOT August soybean lost 22 cents this week, closing at $13.31/bu., as concerns over the global economy, a sharp decline in petroleum prices, and improving weather conditions pressured prices.
Agriculture and Agri-Food Canada reduced its 2011/12 Canadian wheat production outlook this week. AAFC reduced their all-wheat production estimates from last month’s projections due to a reduced harvested area outlook. AAFC projected Canadian durum production at 3.8 MMT, down from July’s estimate of 4.0 MMT. AAFC’s projected 2011/12 all-wheat production for Canada stands at 23.0 MMT, down from an estimated 24.0 MMT last month and below last year’s total of 23.2 MMT.
Informa Economics released its August US Crop Report this week. Infoma revised its 2011/12 U.S. wheat production estimate to 57.6 MMT, an increase of 0.3 MMT from July, which would be down 2.5 MMT from a year ago. The report projected US winter wheat production at 40.9 MMT, up 0.4 MMT from last month. Estimated spring wheat production stood at 15.1 MMT, up 0.1 MMT from the July forecast. US Durum production was pegged at 1.6 MMT, 0.2 MMT lower than last year and 1.4 MMT below last month’s projection.
The ICE Dollar index rose this week, thanks mostly to a strong showing on Thursday. The index gained over one percent on Thursday, reaching 75.12. On Friday, the Dollar Index stood at 74.50, up from 73.85 a week ago.
The Baltic Panamax Index fell again this week. The index stood at 1,478 on Friday, down from 1,511 last week. Destination rates were also lower, with the Gulf/Japan route down $1 to $50/MT.
http://www.uswheat.org/reports/prices/doc/7FEFA42608F54E15852578E30077FDC4?OpenDocument#

Durum:
a range of prices are available depending upon various quality attributes.
Offers from the Lakes range from $13.33 to $13.88/bu ($490 to $510/MT). Offers from Gulf ports range from $14.15 to $14.70/bu ($520 to $540/MT).

Great Lakes:NS/DNS 14.0
$10.23
PNW: NS/DNS 14.0
$11.28

So the CWB Basis on the pooled wheat is costing us (a discount of)$5/bu.

And competition and transparency...