Wheat Technicals Breaking on USDA

[errolanderson]

Everyone . . . just a heads up, today's
USDA report was viewed bearish for wheat
due to hike in global production numbers.

This appears to be triggering chart damage
to U.S. wheat charts . . . may spill into
other grains as well.

[Kodiak]

Errol,

Perhaps Chicago wheat chart is breaking out to the downside on the March daily, but I don't think its is confirmed. But I would say definitely not the hard wheats. In fact if you look at the weekly KC chart, it looks downright bullish!

Can everyone find a chart that justifies their biases??

[VK58]

To me lt looks like the Agri-Invest part is the only portion of the program worth staying in for. Will have to do the math.

[bucket]

Not that long ago the markets were thinking the world was short wheat. Remember russia and the ukraine were talking export bans, argentina has started talking about reduced yields, the UK is under water and importing wheat for the first time in a long time and now poof the world is actually awash in wheat.

Not to mention the substituting wheat for corn because the corn production was way down this year.

Go figure, I guess I missed the memo where it all came from.

The report was pretty much the same as last month. Maybe someone is just taking a break, making a list and checking it twice.

[vvalk]

Just wondering where they found the extra
wheat?

[vvalk]

Sorry wrong topic

[vvalk]

Right topic. Just read the ag invest comment. Big
surprise most of the increases were found in
China. Also since when did the wheat crop in
Australia increase?

[errolanderson]

Wasn't expecting Kansas City to break
today due to the central U.S. drought.
This appears to be large fund liquidation
and sell stops being triggered right now.
Chicago appears taking the lead . . . .

[vvalk]

Errol. Where is the wheat going to come from in
the next 3 months. Argentina wheat crop is very
small and Austarlia doesn't have a surplus. Indus
Russia and Ukraine keep exporting wont the
world have to come to N America?

[errolanderson]

walk . . . Know i'm about to get yelled at
for my opinions, but just like canola,
wheat will be battled for at lower prices.
This is called deflation.

Money is getting tighter. It's like the
NHL owners digging in on the players. The
world is changing out there.

[fjlip]

I thought all the talk is inflation.
Printing money has no effect?
Poorest US wheat rating in 17 years not an issue at this time.
Funds or tight money will determine our income.
But our costs will not decrease unless we are hurt enough to reduce inputs?

[charliep]

Argue with the markets - not us. My thoughts are the markets are focused on the short term - not further out. The short term issue is the fact US and to some extent North American exports are running behind expectations. Send more exports here and the situation has potential to reverse.

HRW areas are extremely dry and raise issues about 2013/14 production. North America has lost importance in world wheat markets with crop conditions around the world more important. Markets will not focus on the 2013 US HRW crop until February March with the highlight wheat markets are paying carry (showing some concern). There is also a recognition that high wheat prices will create more acres in other parts of the world (Mother Nature will decide yields). Read the posts on Agriville as just one sign of how farmers will change crops grown this spring. Witness the massive change in production in 2008/09 after 2007/08.

If you think the market is wrong, stay long crop in the bin/don't forward contract next years potential production.

[errolanderson]

fjlip . . . politicians, bankers and
media are talking up inflation, because
deflation sucks for everybody. Nobody
wants to hear from anybody talking about
deflation. It means we have to pay for
our financial sins with a drop in a
standard of living. It will also take
hostages in the form of foreclosures and
bankruptcies ahead.And nobody wants to
take responsibility for this mess.

QE3 has been less effective than QE2
which has been less effective than QE1.
Diminishing returns and fading power of
the central banks now in-progress.
Bernanke has faded from the limelight.

I'm being blunt, but the piper has to be
paid and money printing is not the magic
pill (IMO)to avoid the pain.

Your input prices may fall as well in
2013.

Errol

[fjlip]

What effect would deflation have on interest rates?
That variable, IMO, would be the final blow due all the cumulative debt world wide.

[bucket]

The unusual thing is china is having better crops year over year and yet they still came to Canada to buy wheat this year, and lots of it. Last I heard was it could be as high as 600,000 tonnes.