Wheat is on fire!

[Herc]

Quit posting when wheat limits up. Ur f’n up the juju…

[V Belt]

RP in wadena said no wht train till May?

RP in Whitewood the same. Told me nothing till T-Bay opens up.

[Partners]

Viterra just dropped their wht $1.00 a bushel..

[errolanderson]

Minneapolis wheat 'limit up' to 'limit down' today . . . nuts!

[sumdumguy]

[ATTACH]10332[/ATTACH]
Sky is on fire also !

That is a sweet shot Case👍

[BTO780]

Target was nine cents away and they wouldn’t trigger it. No surprise!!
Would have been a nice Friday payday. Now wheat is lower.

[Guest]

Getting picked up by the School Bus Case?

I didn't realize you were still a teenager.

***
I wished
Could you imagine if I knew then what I know now

[furrowtickler]

Target was nine cents away and they wouldn’t trigger it. No surprise!!
Would have been a nice Friday payday. Now wheat is lower.

Same here , they just keep widening the basis

[Guest]

I think some of these grain CO’s are scared to buy

[AlbertaFarmer5]

From NAT:
A lot of variables here...but when understood they make sense and are rational behaviors.
If you want to quick read: The wheat markets needs the paper( futures) ...not the cash end of story at the Macro level

A commercial buys cash grain then sells futures. His counter party( the entity he sells cash grain to ( after loading a train, barge, Vessel etc gives him back his short futures position in exchange for the cash. At the local E plant , they buy cash and then sell futures...When Pepsi of the E blender comes calling they either go to the futures market and buy the futures or exchange futures.....Just depends on their protocol. Most Fund managers are required to trade in the front month per their written prospectus to clients.

Above is pretty simple concepts but its the functionality that helps manage the risk for the producer and the rest of the supply chain...Let me repeat that part....Its the functionality that helps manage the risk for the producer.

So....World grain flows are significantly altered by war...And the incremental demand is coming to the US.. Markets which were in balance ebbing and flowing.
Futures valued at $XXX , Futures Carries valued at +xx.....Other markets slightly inverted. Basis Valued at +/-$xx. Freight valued at $x. Fuel$x, etc etc etc. ON any given week or day...The demand for cash grain was equal to the supply of cash grain using all the variables about.( Job of Basis) Perhaps E plant in Aurora need to get 50 more loads bot so he pushes basis a nickel or whatever...But a market in balance.

Here comes the demand...How does that happen?
Your pal at LDC Geneva, your pal who is operating multiple flour mills in Nigeria, you pal at CofCo, Cargill, ADM, Bunge, etc etc...all see the initial demand through their relationships and actively traded cash markets and they can read.
First folks rearrange their trading deck to make up for the bombed ship, the port closure, the added risk, the diversions, and etc.
When the demand for cash exceeds the ability to realign internal stocks....the users go down the supply chain to source volume while total demand remains unchanged...Logistics or timing demand is what is changing.
So while this is happening...the "paper" market sees the opportunity to move higher. The long fund is excited. Board reflects the US supply and the supply is changing here. What do people do when their is a problem in markets? They come for the nearby as generally time solves problems. The rationality of inverses.

As the CME begins to run...The flat price long begins to sell cash. The first purchaser sells nearby futures..and considers himself "standardly hedged" Buying in store and 30 day to arrive and sold May futures. Had a great week...purchased 1M bu and now planning on a raise or maybe a cell phone upgrade. Figures he has just earned an elevation margin and on Friday calls his pal at BNSF or ACBL barge or the secondary freight trade to get a unit coming asap..This pig is on file and I want to ring the gong!!!!!


Wonderful, Thanks for your call..We cant get any there until second week of May....Or we might be able to have a train next week but it will cost you an extra $1000 per empty car. Your the 10 call we have had today....Etc Etc.

Meanwhile Cargill Westwego thought he had a birth open 3/25-3/28. ....Just sold the CCC donation business so its gone . Next available slot in Galviston is 4/2-4/5. Just swapped a vessel that was supposed o load out of Romania with Toepfer etc. Its Gone. The snowball is rolling.

Meanwhile the producer decides hes just " earned" another $1.00 as futures keep running and calls his pal at the elevator who cant get the freight for the train he cant sell to the exporter who cant load it and says ...Whats the bid?.......Meanwhile the merchandiser has just figured out he in fact he can sell the train but it wont be till June and hes short May futures. CME is on the other line with his margin call and maintence margin increase as well as the reminder of the expanded limits.
The " smart guys" have already began to run the futures and now the elevator merchant who is 25-35 years old has never seen this before starts to want to curl up in a ball and cry a little. He goes and talks to his boss who really doesn't understand this "basis thing" but thinks we should give it another day ( 2 days ago).
The snowball now is an avalanche. Meanwhile the angry farmer who is getting screwed is still standing at the counter believing that the basis gyration is some vehicle to bend him over.
Nothing to do here Mr. producer...We are bidding off the Sept as that reflects our and the markets ability to execute. The market always uses the basis like a foot and a brake pedal to balance or provide a cash response to the futures.
So lets see...Wheat went up $4;00 in 4 days and folks expect the market to buy all 500,000 million bushels of flat price length at the same basis or execution value while the wheels of fear and greed hit a fever pitch. Makes sense?

Anyway....a long answer to a simple question but hopefully a glimpse of the "rest of the story". For those who might want to pick apart a particular sentence...Knock yourself out...One could type for the rest of the morning and still not give a solid look at all the moving parts.

[wheatking16]

Target was nine cents away and they wouldn’t trigger it. No surprise!!
Would have been a nice Friday payday. Now wheat is lower.

Was your target a round number?

[BTO780]

Was your target a round number?

I know better than do that. 😂😂

[Guest]

From NAT:
A lot of variables here...but when understood they make sense and are rational behaviors.
If you want to quick read: The wheat markets needs the paper( futures) ...not the cash end of story at the Macro level

A commercial buys cash grain then sells futures. His counter party( the entity he sells cash grain to ( after loading a train, barge, Vessel etc gives him back his short futures position in exchange for the cash. At the local E plant , they buy cash and then sell futures...When Pepsi of the E blender comes calling they either go to the futures market and buy the futures or exchange futures.....Just depends on their protocol. Most Fund managers are required to trade in the front month per their written prospectus to clients.

Above is pretty simple concepts but its the functionality that helps manage the risk for the producer and the rest of the supply chain...Let me repeat that part....Its the functionality that helps manage the risk for the producer.

So....World grain flows are significantly altered by war...And the incremental demand is coming to the US.. Markets which were in balance ebbing and flowing.
Futures valued at $XXX , Futures Carries valued at +xx.....Other markets slightly inverted. Basis Valued at +/-$xx. Freight valued at $x. Fuel$x, etc etc etc. ON any given week or day...The demand for cash grain was equal to the supply of cash grain using all the variables about.( Job of Basis) Perhaps E plant in Aurora need to get 50 more loads bot so he pushes basis a nickel or whatever...But a market in balance.

Here comes the demand...How does that happen?
Your pal at LDC Geneva, your pal who is operating multiple flour mills in Nigeria, you pal at CofCo, Cargill, ADM, Bunge, etc etc...all see the initial demand through their relationships and actively traded cash markets and they can read.
First folks rearrange their trading deck to make up for the bombed ship, the port closure, the added risk, the diversions, and etc.
When the demand for cash exceeds the ability to realign internal stocks....the users go down the supply chain to source volume while total demand remains unchanged...Logistics or timing demand is what is changing.
So while this is happening...the "paper" market sees the opportunity to move higher. The long fund is excited. Board reflects the US supply and the supply is changing here. What do people do when their is a problem in markets? They come for the nearby as generally time solves problems. The rationality of inverses.

As the CME begins to run...The flat price long begins to sell cash. The first purchaser sells nearby futures..and considers himself "standardly hedged" Buying in store and 30 day to arrive and sold May futures. Had a great week...purchased 1M bu and now planning on a raise or maybe a cell phone upgrade. Figures he has just earned an elevation margin and on Friday calls his pal at BNSF or ACBL barge or the secondary freight trade to get a unit coming asap..This pig is on file and I want to ring the gong!!!!!


Wonderful, Thanks for your call..We cant get any there until second week of May....Or we might be able to have a train next week but it will cost you an extra $1000 per empty car. Your the 10 call we have had today....Etc Etc.

Meanwhile Cargill Westwego thought he had a birth open 3/25-3/28. ....Just sold the CCC donation business so its gone . Next available slot in Galviston is 4/2-4/5. Just swapped a vessel that was supposed o load out of Romania with Toepfer etc. Its Gone. The snowball is rolling.

Meanwhile the producer decides hes just " earned" another $1.00 as futures keep running and calls his pal at the elevator who cant get the freight for the train he cant sell to the exporter who cant load it and says ...Whats the bid?.......Meanwhile the merchandiser has just figured out he in fact he can sell the train but it wont be till June and hes short May futures. CME is on the other line with his margin call and maintence margin increase as well as the reminder of the expanded limits.
The " smart guys" have already began to run the futures and now the elevator merchant who is 25-35 years old has never seen this before starts to want to curl up in a ball and cry a little. He goes and talks to his boss who really doesn't understand this "basis thing" but thinks we should give it another day ( 2 days ago).
The snowball now is an avalanche. Meanwhile the angry farmer who is getting screwed is still standing at the counter believing that the basis gyration is some vehicle to bend him over.
Nothing to do here Mr. producer...We are bidding off the Sept as that reflects our and the markets ability to execute. The market always uses the basis like a foot and a brake pedal to balance or provide a cash response to the futures.
So lets see...Wheat went up $4;00 in 4 days and folks expect the market to buy all 500,000 million bushels of flat price length at the same basis or execution value while the wheels of fear and greed hit a fever pitch. Makes sense?

Anyway....a long answer to a simple question but hopefully a glimpse of the "rest of the story". For those who might want to pick apart a particular sentence...Knock yourself out...One could type for the rest of the morning and still not give a solid look at all the moving parts.

really good read!

[shtferbrains]

Some countries looking at banning exports to control rising food costs.

China was an active buyer last week.

Egypt has been a big purchaser of Russian Ukrainian wheat.
https://www.nasdaq.com/articles/egypts-gasc-says-it-has-cancelled-its-international-wheat-tender

Will be some panic buying by countries that always import. Have to keep the bread on the table.

Might come to where the sea can shippers are the bulls in the market?

The freight incentive for shiping unit trains is insignificant in current situation?

[Old Cowzilla]

Grain traders must hate when they go through all that hassel to train grain farmers only to have somebody come along and screw it up.