New Crop Wheat spring &/or winter

[boarderbloke]

anyone been advised to take a Fixed price(CWB) for New crop wheat, is the basis predictable at all, or is it too big a risk till it comes out at the end of Feb? I think prices quoted on Fri are the highest yet achieved, is it possible to see more upside with the buying of acres, or is the window for increasing wheat yields/acres passed with the winter wheat planting? Can spring wheat acres complete with corn($5.oo and/or beans($12.oo) at all?

[charliep]

Will let others comment on whether to price.

Can provide some perspective on basis based on what the CWB has done in the past using the CWB website.

1CWRS 13.5 Grain World Day Basis (Feb.) 2007 - $5.73 over. 2006 - $20.86 over. 2005 - about $25 over. 2004 - about $15 over. My guess 2008 - zero with the comment an optimist will use $10 over and a pessimist $10 under.

CPS (heavan forbid) has been the most consistent basis. 2007 - $17.80 under. 2006 - $20.86 under. 2005 - $3 over. 2004 $12 under. My guess $10 to $15 under.

SWSW - Will only give numbers (no forecast). 2007 - $3.55 under. 2006 - $13.01 over. 2005 - $20 over. 2004 - $12 over.

Should check exactly but somewhere in the neighbor of 2/3 of the US is winter wheat. European winter wheat acreage will be an even high percentate. Wheat fundamentals as in acreage are to a large extent determined with impact winter/condition next spring the factors determining the yield portion. Should be watching India/Pakistan for clues on their winter season crops - note the recent comments/increase in imports.

[charliep]

Last year, spring wheat was about 1/4 of US wheat production (449 mln bu of hard spring and 72 mln bu of durum versus total US wheat production of 2.1 bln bu. 2006 - closer to 1/3.

[charliep]

Want to pull back my CPS guess. Looked at current futures spreads and am way too optimistic. Would say CPS likely to be $20 under with really optistic person at $10 under and a pessimist at $30 under.

SWSW likely $10 under with a pessimist using $20 under.

Note all these are based on the first fpc after Grain World (February 25 this year).

[boarderbloke]

thanks for responding charliep, so it seems then, that the maximum wheat output from the northern hemisphere has largely been determined by the winter acreage.(was the winter acreage much different than avg., in the USA and EC) Even if farmers increase their spring acres, the difference would be minor as far as output goes, in the big picture. Dec 08 Wht is moving up nicely now(signaling for spring acres) but I'm thinking that if the winter crop breaks dormincy dry or poor, the market(particular MGE Wht) would have to communicate the need for acres between Mar.10th and Apr.20th