MGEX wheat

[farmaholic]

When is MGEX wheat coming out of the rut? Or at the very least, stop slowly digging in deeper?

farming101, do you have anything charted for stocks, movement, prices? Are we ANYWHERE near a point of tightening(not tight) supplies to reverse this trend.

Wheat is such a big picture thing, lots of moving parts in that market.

Is it burdensome stocks(US domestic and/or worldwide) or the strong US dollar, or both keeping wheat down so bad. If there was enough demand I would think the US dollar wouldn't be weighing on prices as heavy?

Where could the next bit of fresh bullish news be coming from to move this up, how much f-en lower can this go?


Any thoughts?

[farming101]

The recent pop in price if you can call it that showed that the short crowd is not against taking a cookie.However the world wheat stocks, strong US dollar and general market willingness to short everything means not much change for the near future. First hope for a turn looks like spring seeding time.

[farmaholic]

July....

Jan 8 give
Jan 11 take it all back
Jan 12 give lots
Jan 13 take half back
Jan 14 take the rest back

Give
Take
Take

Looks like it could be another take day today

I'm getting sea-sick.

[poorboy]

I hope that I am wrong, but I think that wheat has made its high on the US futures and is going to steadily drop. In looking back at past charts when oil was very low, the wheat prices also dropped with about a 9 month lag. When oil climbed it also took 9 months before grains climbed.

That is the US prices. Our weakening loonie is buffering the price drop and may actually cause wheat to increase in Canadian dollars as we slide towards a 61 cent dollar.

Currently thinking there may be some opportunities right now to lock in US futures prices on wheat for future months and then as our dollar drops the basis will strengthen.

Looks to me right now that US wheat is overpriced on the world market because the US dollar is so strong against every other commodity. This is increasing wheat stocks and the only way to increase sales for the US will be to have huge gov't subsidies to lower the export price or lower the futures price to make export sales more competitive. I am thinking the 2nd choice of lowering the price of wheat on the futures is what we are going to see.

As we ride the Canadian dollar down, prices and per acre returns don't look to bad. Once the dollar bottoms and holds for a while it is going to get ugly for prices in Canadian agriculture.

[farming101]

A few observations:

Technical: Mar contract has moved off the median line for the first time in months.
Only a few weeks left for Mar to be the front months.

Since the beginning of Jan carry in the market has diminished.

Fresh attempts to push MGEX contracts lower may not have
much success. Could be some stability and small gains for the next few weeks.

[farmaholic]

I follow July for my pricing at the moment. But they are usually a mirror image of each other anyway. Using July will help me get my target price. It has gotten close but then retreats between futures and basis moves........grrrr. I would sure like to see this thing turn higher.

[farmaholic]

Odd how an actual marketing thread can get started and have so few posts, yet a political finger pointing blame game thread can go on forever.....

[farming101]

Just watching with interest what happens when traders roll out of the Mar.
The trends(down) are still intact. Must be respected. The drop off in Aug created
such wide range it may not be able to detect early trend changes. Thus the post. Also,
If oil and the CAD are bottoming it may do some damage to the relatively good basis levels.

[farming101]

Just watching with interest what happens when traders roll out of the Mar.
The trends(down) are still intact. Must be respected. The drop off in Aug created
such wide range it may not be able to detect early trend changes. Thus the post. Also,
If oil and the CAD are bottoming it may do some damage to the relatively good basis levels.

[farmaholic]

I've seen some erosion to the basis and futures. Had a quote(for my quality) of $6.90 at the end of last week, now looking at $6.60.

What do you mean "the drop off in Aug..."

[farming101]

August 2015

[farmaholic]

Thanks for replying and participating farming101.

[Oliver88]

I've seen some erosion to the basis and futures. Had a quote(for my quality) of $6.90 at the end of last week, now looking at $6.60.

What do you mean "the drop off in Aug..."

The basis narrowed close to 20 cents through Thursday-Friday last week due to the dollar increasing 2-3 cents.