Wheat

[Agvocate]

This has branched off in a few directions but will throw out my opinion on a few items:

MGEX - $6.00 has held in the nearby recently. Technically a close below that level can open up more room for downside, if the spread to KC and Chicago continue to narrow and your local elevator protein spreads narrow in, tells me the market has enough protein for the time being. If all that continues not a whole lot of reason to be bullish spring wheat. Wheat rallies are meant to be sold until I read at least one article that suggests supply is tightening overall.

Funds/Computers/Algo's - Like a lot of things I comment about, you don't have to like that they exist, but you have to deal with the fact they do. Most of the attention paid to funds by producers or on any of these threads is when they are record short and seen to be driving price lower than fundamentals would suggest. Realizing the opposite is also true when they are long is opportunity. If you believe futures have been pushed 50 cents to low at times, they probably have been pushed 50 cents too high as well.

If you can remove the emotional attachment to what you produce and just look at a spreadsheet of returns you are likely to make a better decision regardless of your understanding of futures, technicals, algo's etc.

[farmaholic]

Thanks Tasfarms, Bucket and Agvocate..... so far.

[farming101]

MW is a predominantly North American focused market. Bottom line is the market is supplied. The US is conserving its supply of HRS for domestic use and doing a great job.US exports including future sales on the books are sitting at less then 73% of last marketing year.
Other areas of high protein production are Australia, Russia, Ukraine, Kazakhstan

Canadian sales into the US market are much higher than last year. Movement from Sask for example, is up 40% from last year Aug-December period.
North Dakota prices for 14%px are up 12% from May 17. Canadian prices are steady to lower over the same time period because the CAD was in the basement last May, CN's 2017-18 grain program has come up way short on what is required, there was an increase in total rail traffic beginning in August and the overall protein content of HRS this year is down substantially and could be called a multi year low. In a year when the world wheat market is well supplied having lower protein wheat is very bad. Price is everything.

The World market for Canadian high protein wheat is limited. There is no country in the world that takes a large percentage of their wheat import needs solely from Canada, save one. The US. There is competition in every market from around the world. Canada cannot compete with bumper crops from Russia.

Indonesia, recently named the largest wheat importer in the world imports about 16% of their needs from Canada. While unscientific it would suggest that their mills blend to get the quality they need with that amount.

Positive is that Canadian wheat still commands as high a price as anywhere.
Negative is that old crop wheat needs a shot in the arm. First would be to get some ships loaded. 14 incoming on the west coast this week. To clear 14 this week would be a miracle(sunny today, 2 terminals aren't even loading?). Thus it's likely that the ship count is going up.
Any bump in values for old crop will be spilling over from Kansas wheat problems. The increase would be muted but could amount to 40 or 50 cents. Next up is the prospects for HRS areas. Right now conditions are dry and everyone knows it. We could see a repeat of last summer's price runup very easily and it would happen earlier.
Watch new crop. It is a very different set up than old crop.
Might be as soon as early April out till early May. Doubt too much will happen before then. The Kansas spillover could happen by then but may get partially absorbed by basis if logistics don't get better. I think the risk of lower values for the next eight weeks is small(8-10 cents US)

Agvocate-here's your article(a little dated): https://agfax.com/2018/01/25/wheat-market-global-supplies-of-high-protein-wheat-keep-tightening/ https://agfax.com/2018/01/25/wheat-market-global-supplies-of-high-protein-wheat-keep-tightening/

[Agvocate]

101: Well written, appreciate the post. Would love to see a sustained rally in wheat, but selling minor weather scares has proven a good strategy thus far. The time I am wrong and it continues higher, just hope my previous sale wasn't the last bin I had for sale.

[farmaholic]

Thanks 101, lots of food fòr thought, off the charts 👍

[farming101]

West Coast ship count has grown to 37 this week with 17 on the way. Cleared 8 last week.
This will be interesting if they all show up

[bucket]

How much tonnage available on those 54 vessels?

What is the longest a boat has been there?

[macdon02]

South Africa is seizing all the farms from white farmers without compensation...... about 12 Mt of corn is currently produced..... this'll ripple the supply chain

[bucket]

I thought I just read somewhere recently that a country in africa was asking the white farmers to come back after the disaster of kicking them off?

[farming101]

As of Feb 25 there were 6 at Vancouver and 2 at PR that have been there more than 15 days.
I'm not sure what the longest stay was

Possible average of 47,000 tonnes X 37 ships is 1,739,000 tonnes

Supposing they are able to clear 12 this week and all show up that are on the way there would be about
1,974,000 tonnes (42 ships) to clear at the beginning of next week guessing at an average of 47K per ship.

Some are partially loaded