Wt Wheat Discussion Threads

[deepvalueinvestor] 12/1/2013 17:27

Thanks for highlighting this skyShip. Now forgive my ignorance as rarely invest in commodity etfs but i am looking for a soft commodity investment to offer some inflation protection and ideally some us$ exposure.Is this just a straight play on the current us$ price of wheat or based on futures? I have had problem with contango on commodity investments in the past.

[skyship] 27/12/2012 17:25

Just how far will these retrace? They'll be right to buy again at some stage; but will that 61.8% FIB retracement hold; or is it falling back to the lows...

[bobdouthwaite] 21/4/2011 09:21

Indeed. As this recent article from Agrimoney says, wheat production in four of the five top producers - the US, the European Union, Russia and China is now affected by drought; and snow is affecting areas in the US that should be planted for spring wheat.

"IGC widens forecast for grain deficit in 2011-12

Grains gurus have slashed hopes for any recovery in world grain inventories next season, lifting forecasts for consumption at a time when weather is threatening crops in many major producing nations.

The International Grains Council, which a month ago pegged the production deficit in grains in 2011-12 at 3m tonnes, on Wednesday lifted its estimate to 10m tonnes.

The deficit will lower stocks to a four-year low of 334m tonnes, representing 18.4% of consumption, down from 23% two seasons ago, when readier supplies accelerated a fall in grain prices.

"A further downturn in world carryover stocks is likely," the IGC.

'Less-than-ideal conditions'

The forecasts helped a rally in grain prices which took Chicago wheat for May back over $8 a bushel at one point, and saw London's May contract hit a record high of £222.00 a tonne.

Closing crop prices

Chicago wheat: $7.85 a bushel, -0.1%

Kansas wheat: $9.20 a bushel, -0.7%

Minneapolis wheat: $9.38 ¾ a bushel,-0.5%

Chicago corn: $7.32 ¾ a bushel, -2.2%
Paris wheat: E253.75 a tonne, +1.0%

London wheat: £217.50 a tonne, +0.2%

Prices for May contracts
However, the rally foundered as weather forecasts introduced drier weather into the outlook for major US corn areas, where chances had looked dim of getting sowings wrapped up anywhere near May 10, seen as the cut-off date after which yields suffer.

"Latest extended outlooks have turned drier and could allow the farmers in the fields in early May," Benson Quinn Commodities said.

While the broker, for wheat, noted continued "dry conditions in US, the European Union, Russia and China" – four of the world's top five producers – and snow in North American areas gearing up for spring wheat plantings, corn prices lost 2% in Chicago, dragging US wheat into negative territory by the close.

'Very low supplies'

The IGC flagged the threats to wheat production in cutting by 1m tonnes to 672m tonnes its estimate for the world harvest in 2011-12.

Selected IGC world forecasts for 2011-12 and (year-on-year change)

Corn harvest: 847m tonnes, (+4.7%)

Corn year-end stocks: 186m tonnes, (-6.7%)

Wheat production: 672m tonnes, (+3.4%)

Wheat year-end stocks: 186m tonnes, (unchanged)

Total grains production: 1.808bn tonnes, (+4.5%)

Total grains year-end stocks: 334m tonnes, (-2.6%)
"Less-than-ideal conditions for some crops lower the projection of world wheat production," the council said, adding that "adversely dry conditions and a delayed start to spring seeding in parts of the northern hemisphere may affect the final outcome".

But it highlighted world corn inventories as set to prove particularly thin in 2011-12, falling for a third successive season, this time by 8m tonnes.

"Unless the US maize [corn] crop exceeds all expectations, supplies of this grain will remain very low," despite better prospects for the European Union crop this year, and a likely switch by livestock farmers to wheat in the face of high corn prices.

Indeed, IGC analysts lifted further their estimate for corn consumption by US ethanol plants.

They also highlighted concerns about "dwindling supplies" of high-protein milling wheat, following rain damage to last year's Australian, Canadian and German crops."

[notanewmember2] 21/4/2011 07:08

This looks interesting at $2.50 now.

[aishah] 29/12/2010 13:28

London wheat price hits record £200 a tonne

[aishah] 07/12/2010 13:09

Weather Worries Lead to Surge in Wheat Prices

[mart] 09/11/2010 17:45

Yes, more details on Corn (& wheat) thread.

[aishah] 09/11/2010 14:47

Whooosh! Assume USDA has lowered its estimate for global supply

[hosede] 04/10/2010 19:06

Well that appears to have been short-lived. Glad I got out around 2.55

[nabcom] 06/8/2010 11:17

'US Wheat prices surge 71%, inflation to soar'

"Combined with rising oil prices, Americans will begin to see massive price inflation in the months ahead in the two areas that matter most: food and energy."

[aishah] 04/8/2010 14:03

Daily Express headline today:

[aishah] 03/8/2010 09:49

Rise in wheat prices fastest since 1973

[aishah] 02/8/2010 19:00

Wheat Prices Hit 13-Month Highs

[nabcom] 02/8/2010 09:48

09:09 GMT, Monday, 2nd August 2010, by Agrimoney.com

Morning markets: wheat sprints into August as Russia bakes

[aishah] 02/8/2010 09:40

Soaring now on huge volume

[nabcom] 30/7/2010 12:09

Wheat Heads for Biggest Monthly Climb Since 1973 as Russia Drought Worsens
By Jeff Wilson - Jul 29, 2010 4:32 PM GMT+0100

Wheat rose, heading for the biggest monthly gain since 1973, and corn and soybeans advanced as hot, dry weather damaged crops in Russia and other parts of Europe, boosting demand for U.S. supplies.

[mart] 29/7/2010 13:44

This has some momentum. Other plays (but obviously more volatile) - LWEA and SV68.

[aishah] 29/7/2010 09:54

Nice uplift recently.

Commodities are only half way through their bull market

[ruethewhirl] 16/3/2010 00:21

Getting close to the Sept 09 lows.

Bullish divergence on daily MACD histogram shaping up.

[andrewbaker] 11/3/2010 11:39

These ETFS ETF are really for short term trading on momentum. They do not always follow the market, plus contango and leverage makes price moves more volatile than the underlying. When buying, set a trailing stop loss and act on it, and make sure that when there is a profit, you take it and do not wait when the trend ends.

[andrewbaker] 11/3/2010 11:38

These ETFS ETF are really for short term trading on momentum. They do not always follow the market, plus contango and leverage makes price moves more volatile than the underlying. When buying, set a trailing stop loss and act on it, and make sure that when there is a profit, you take it and do not wait when the trend ends.

[shavian] 06/9/2009 07:38

Thanks Red, I agree. WEAT and CORN stay on the watchlist for now. NGAS/NGSP is much more interesting - I ve just posted the following on the NGSP thread:



You are right about the numpties. ETFs are not always the harmless trackers the Sunday press seem to portray them as. I got a nasty surprise when I found that the AIG backed Energy and Agriculture ETCs did not do "what it says on the tin" last autumn! Important to look under the bonnet...

Good hunting

[redprince] 05/9/2009 18:23

Shavian- i have been posting quite a bit on the lnga gas thread this week-v interesting situation there but many posters showing that they dont fully appreciate the dangers of investing/speculating in a leveraged etf.

As for weat and corn- been reading about the poor crops in Texas and California but a farmer friend of mine tells me that cereal prices should remain depressed for the foreseeable because Ukraine and Southern European farmers are harvesting plenty.

Any views?I think its one to watch for now but i dont see any immediate upswing for some months yet?I am new to these etf`s only having bought some silver in one earlier this year.

[shavian] 05/9/2009 09:18

Just found these on Dailyfutures.com


Wheat:

From 1998 to 2002, wheat traded under $3 per bushel with plenty of supply and falling demand. In mid-2006, prices gained strength and eventually hit $13 per bushel after weather problems hit several different wheat-areas, all in the same season. In March of 2008, prices got hit with strong selling and then fell more, thanks to the financial panic in the second half of 2008. Wheat supplies are plentiful and prices are weak (updated 9-1-09).

Corn:

In September of 2006, corn prices started to reflect a significant boost in ethanol production and that fundamental is still growing, but the big up-trend was interrupted by the financial crisis in the second half of 2008 and the second largest planting in 2009. So far, prices remain weak (updated 9-1-09).

Seems to indicate no great pressure to turn upwards in the US for the time being. But worth keeping an eye on...