Funds long

[malleefarmer]

Looking at this graph history suggests sentiment will change from long to short sometime soon

Larry McDon Errol tech any others expert advice welcome

Looking at foward selling today perhaps here in oz 5 to 10% expected production at a pice which will equate to around 290/300 on farm fo 2020 harvest

[TechAnalyst]

That sounds like a wise strategy Mallee given the recent strength.

I think you are correct in watching the Managed Money positions. When they believe in a move, they trade aggressively enough to have a significant impact on prices. The problem is they are your friend (assuming the move is in the right direction) until they aren’t. That is, you can never know for sure when they will go from aggressive buyers to aggressive profit takers (sellers in this case). All you can do is sell in small increments while they are building their position, especially when they approach their historic extremes.

My concern with the chart you presented is twofold. First, I believe the most important total is the Net Position. That is - the total of Outright Longs minus the total of Outright shorts. As interest in a market grows, the amount of positions on both sides usually increases. Tracking the Net Position tells you more accurately when the market is getting too extended in one direction.

The other concern I have is the length of time considered. The six years displayed on the chart missed the extreme volatility around the drought that hit the US Midwest in 2012. It was during that period that the Managed Money Net Positions hit a record long of 80,827 contracts (Aug 7, 2012). The Net currently stands at 29,787. As a result, money managers could add another 50,000 contracts or 250 mil bu to their net long position without hitting the record high.

In short, it’s always good to sell in small increments into a rally but there should be room to push higher yet.

Hope that helps…

[Oliver88]

Any thoughts on March Minneapolis contract?

[malleefarmer]

Sold wheat at $318 and feed barley @$250 subtract $29 to get on farm price.

Did 12% of expected production historically.

Above prices decile 8.5/9 meaning forwards have traded above this 10 to 15% of time.

If it’s my worst sale of the year so be it.
3 scenarios

Another drought these prices will be left behind by $40

Average year prices will ease

Bumper year prices will collapse

Talking domestically.

Can world wheat rally from here quite possibly, will that translate into higher already inflated domestic when compared to world parity who knows.

Ps I don’t foward sell canola high risk crop for me.

Thanks for input.

Yield is everything in oz yield and price the holy grail

The sold grain is in domestic market, could have I done it myself, maybe but don’t want hassle if market collapses, easier to go through middle man and forgo 5 bucks

Edit this will be a back to back contract I’m sure or double sided what ever you want to call it. Meaning I’m 9ne one side as seller, and a buyer would have signed up the other, who knows who cares, currently delivery is into local elevator 32 kms away .

Grade spread could be set or floating I chose set. Known best been burnt with floating spreads

[TechAnalyst]

Any thoughts on March Minneapolis contract?

Although Chicago Wheat depicted in this thread is definitely the leader (as covered in the Chicago higher than Minneapolis thread), I do expect Minneapolis will work higher along with it.

There has only been one occasion in the last 20 years of this Monthly MW - ZW spread chart that Minneapolis was a greater discount to Chicago, in 2007. Given the quality concerns of the hard red spring wheat crop, one would assume Minneapolis wouldn't lose much more ground on Chicago and could even gain a bit back.



There will be corrections along the way but Minneapolis is trying to close above resistance at $5.70/bu on the March futures. Such a move would set up the potential target of a double bottom to $6.40/bu. That seems to be consistent with macdon's views in the other thread.

[Oliver88]

Minneapolis March is having trouble going above 565 so far. Seeming to fluctuate between 5.50 to 5.60 mainly.