Changes in World Wheat Market

[charliep]

Just an interesting quote from a newsletter I get (Ken Ball/Benson & Quinn).

"US wheat futures crashed into new lows yesterday, with losses of
8-12 cents. The USDA numbers were largely neutral, but the one that seemed
to stick in traders minds was the increase in FSU wheat exports to 21.7 mmt. This number has been used by analysts for a while, but it reminded traders that the current world wheat market is not even remotely similar to the market of 10-12 years ago. The FSU, as a group, will be the world's second
largest wheat exporter, only slightly behind the US estimated exports of about 25.9 mmt. The FSU will export more than Canada and Australia combined."

A sign of challenges ahead for commodity based wheat in the export market.

[wedino]

Charlie, I hate to ask & display my ignorance, anyway what is "FSU"?

[rain]

Charlie you have been in this industry longer then me. How do you find the whole wheat situation as far as US wheat futures. I tend to beleive with wheat in particularl, that this commodity if more technically traded then fundamentaly traded. I have read a few stories about how much more the funds control the market more then in the past. What are your thoughts?

[ianben]

FSU is former soviet union, Russia and Ukraine are main exporters I believe.

Still looking for some information on reliability of this wheat as I asked earlier.

Have things changed and this wheat will be be there long term or just a production blip?

Is it weather related opposite to Canadian and Australian situation?

Is it currency or agronomic factors which mean customers can depend on it?

If they can produce wheat at £14/$35/tonne can either of us compete?

[rain]

I read twice today that wheat from the Ukraine has been found to be contaminated with DDT.

[charliep]

Rain

The expression wheat is 13.5 % protein and 86.5 % politics applies. Wheat is the world grain market that has the most politics in it.

I don't know if wheat is more techically traded than other futures. The is a general lack of fundamental news/confusion about why wheat is going down in a market that has a positive outlook. Much relates to many customers by passing North America and going to the new exporters/Europe (prices are US $40 to $60/t cheaper than US product). Sluggish export demand, speculators that are either loosing their shirts or have gone short, and buyers that covered needs early on at higher prices/are now patient in a declining market are all pushing prices lower. In this type of markets, charts become the explanation/excuse of choice.

FSU is the former Soviet Union countries.