Market gurus

[malleefarmer]

Will June July highs get met? Wheat

[farmaholic]

Looks like June /July has been the peak the last three years. It may get there sooner for quality wheat this year.

ps, I am no guru. I have no clue.

[farming101]

The chart appears to be plotting the March Chicago wheat continuous contract.
If you hedge your wheat at the same time every year I guess it may have some value.

To me about all it's showing in hindsight is that farmers should have hedged their 2020 crop in late July 2018. We saw 260/t CAD Sask average that week and haven't seen it since
Looking ahead the chart has drawn a pennant. Look for breakouts of the formation the nearer it gets to where the trendlines converge.

Chicago is technically the soft red winter wheat contract. SRW stocks are projected to fall quite a bit over the next while. That could be bullish for SRW and not so much for everything else. But traders the world over dabble in the Chicago market so often times SRW is just along for the ride

[bucket]

No upside for quality wheat going into 2020???? Considering this dismal harvest I thought they might eventually offer up a premium to grow wheat .

[farmaholic]

Wheat might not have to rally if they can make the "cornucopia" of feed Wheat work!!!!!

[macdon02]

Watch Chicago on yr end, needs to close above 535. That area has been our "pivot point" on rallies. Also watching $6 on the top end, seems to be keeping a lid on things. The bounce off the $470~ lows on Minneapolis likely indicating we are gonna try the top end again, think of a pendulum. If we can sustain a rally longer then 3 months without retesting the losses, the "mood" shifts and its no longer a reaction, trend starts setting in. We just had a shift in beans to a bullish bias, corn and oats are also bullish, we need wheat to join in and lead. Fwiw the EU is implementing all sorts of regulation to save the planet and throttle ag production. They might be giving us a gift assuming our govt doesn't follow suit.

[farming101]

No upside for quality wheat going into 2020???? Considering this dismal harvest I thought they might eventually offer up a premium to grow wheat .

Sorry, meant to type 2019

To me about all it's showing in hindsight is that farmers should have hedged their 2019 crop in late July 2018.

[farmaholic]

Where's Weber's CGC grade distribution pie charts. I look forward to seeing the next ones and how they compare to the previous ones. Putting both up beside each other in the newsletter woukd make for easy comparison. Subscribe.

[TechAnalyst]

Another thing to keep an eye on is the corn / wheat spread. Chicago wheat shown above has had a premium to corn of between $.50/bu and $2.20/bu over the last five years. The premium is currently about $1.15/bu. If corn does break up on a final realization that all the weather woes this year did make a difference, wheat should as well supported by the substitution effect (as seen in the spread).

The long term charts suggest this springs rally in corn was the beginning of a bull market. When the USDA rained on the parade, the pullback set up buy signals which have triggered. The targets of these formations would be $5.30/bu initially with $5.70 a secondary target for corn. If you add the current spread for Chicago wheat, it should take those prices up to the $6.50/bu range.

Minneapolis wheat historically trades at a flat price up to $1.80/bu premium to Chicago wheat, depending on the supply of high protein (and quality) wheat. Given the horrid weather throughout the spring wheat areas of North America, it would be reasonable to assume such a rally would take Minneapolis wheat up into the $8/bu US futures range.

Time will tell.

[malleefarmer]

Not technical but fundamental barley harvest started in oz Mexican standoff farmers want $300 in paddock , market traders end users want to pay about $25 less.

Market standing back waiting to see what tonnages/yields will be like in 4 weeks time. When harvest starts full tilt.

Sadly if domestic grain gets super expensive imports happen. But But when it gets here from overseas destination then tracked inland to were ever almost ends up same price and quality may not be100% assured.

Keep ya posted

[Guest]

$275-300 would be a dream here
Currently about half of that here
Or are you talking malt and me feed?

[errolanderson]

Strategy for low quality wheat . . . consider moving feed wheat and replace with higher quality paper. ie: Minneapolis spring wheat call options. This strategy injects cashflow, while upgrading your wheat quality on paper. In the event a winter rally, top grade price gains will outperform the feed market.

This strategy could be used for canola as well . . . .

[bucket]

Strategy for low quality wheat . . . consider moving feed wheat and replace with higher quality paper. ie: Minneapolis spring wheat call options. This strategy injects cashflow, while upgrading your wheat quality on paper. In the event a winter rally, top grade price gains will outperform the feed market.

This strategy could be used for canola as well . . . .

Good idea....now where do you get rid of tough/wet feed wheat?

If you can't answer that question there isn't much chance of taking on the next part of the equation....

[farmaholic]

Strategy for low quality wheat . . . consider moving feed wheat and replace with higher quality paper. ie: Minneapolis spring wheat call options. This strategy injects cashflow, while upgrading your wheat quality on paper. In the event a winter rally, top grade price gains will outperform the feed market.

This strategy could be used for canola as well . . . .

A more detailed example please. Numbers, options costs, etc.

[furrowtickler]

Strategy for low quality wheat . . . consider moving feed wheat and replace with higher quality paper. ie: Minneapolis spring wheat call options. This strategy injects cashflow, while upgrading your wheat quality on paper. In the event a winter rally, top grade price gains will outperform the feed market.

This strategy could be used for canola as well . . . .

A decent strategy, will just have to see if there are any pennies left after bills are paid to do that.
Selling feed wheat at break even or in some cases a loss leaves very little or zero to play with.
It’s an unfortunate reality in many areas this year many can’t grasp. Two bad harvests in a row have left some areas with SFA .