Wheat futures have been riding high over the last four weeks, but that seems about to end, even though weather conditions in Canada and Russia continue to cause problems for the grain.
The challenge for wheat, as it has been for years, is the increasing amount of acreage around the world being dedicated to growing the grain.
With that in mind, the inevitable bad weather in various parts of the world, while having a temporary impact on wheat futures' prices, overall level off and bring them back down to where they belong.
Until there is a move toward planting less wheat, which is unlikely any time soon, this will remain the way things are.
Heading into August, wheat futures will drop down to about $5 a bushel, or even lower.
Showing posts with label Wheat Futures. Show all posts
Showing posts with label Wheat Futures. Show all posts
Friday, July 23, 2010
Wednesday, March 10, 2010
Wheat Outlook Dismal on Supplies
Wheat Inventory High
Stockpiles of wheat are leaving the industry reeling even more, as the largest inventory in over 20 years is emerging from the heavy wheat harvest.
Projections are there will be close to 1 billion bushels of wheat in the warehouses and bins when the harvest comes in; 20 million bushels beyond the estimates of the USDA.
The already low prices will drop even lower, as farmers continue to plant the grain based on prices from several years ago, rather than prevailing market conditions.
This is expected to finally correct the over-planting of wheat as farmers look to other areas to generate profits, as wheat hasn't been doing it for a few years.
The reasons for wheat being so abundant is lower exports as many countries are planting wheat and getting good results, and American consumers aren't consuming as much, driving domestic demand down. That and just too much wheat being planted is the issue driving the huge wheat inventory.
Wheat Inventory High
Stockpiles of wheat are leaving the industry reeling even more, as the largest inventory in over 20 years is emerging from the heavy wheat harvest.
Projections are there will be close to 1 billion bushels of wheat in the warehouses and bins when the harvest comes in; 20 million bushels beyond the estimates of the USDA.
The already low prices will drop even lower, as farmers continue to plant the grain based on prices from several years ago, rather than prevailing market conditions.
This is expected to finally correct the over-planting of wheat as farmers look to other areas to generate profits, as wheat hasn't been doing it for a few years.
The reasons for wheat being so abundant is lower exports as many countries are planting wheat and getting good results, and American consumers aren't consuming as much, driving domestic demand down. That and just too much wheat being planted is the issue driving the huge wheat inventory.
Wheat Inventory High
Saturday, August 15, 2009
Wheat Futures Prices Near Term
Wheat Futures Prices
Wheat futures in the U.S. should continue to go nowhere for some time ahead unless something extraordinary happens where huge losses come about, which could probably only happen in Australia.
Production estimates for wheat continue to increase while demand decreases, cutting back significantly on wheat exports.
The USDA estimated 2009 U.S. wheat production was raised to 2.184 billion bushels from its July estimate of 2.112 billion, while the global wheat crop increased to 659.3 million tons from 656.5 million tons last month. The USDA's estimate for global ending stocks -- or what is left over after supply and demand are accounted for - also increased.
Wheat prices have plunged over the past year as global supplies have increased, and there is little sign of anything changing.
The continuing bearish information strengthened "the prevailing tone of the wheat market - one adrift in search of a persuasive fundamental storyline and dependant upon direction from other commodities," J.P. Morgan analyst Lewis Hagedorn said. "Absent a large decline in Australian production or demonstration of increasing global demand for protein wheat, prices appear likely to continue a gradual downward slide."
CBOT wheat will probably continue to experience new contract lows, although losses will be limited during the medium term by possible strength in CBOT corn and soybeans. Wheat prices should generally remain rangebound during the next couple of months.
Projections are it's possible September wheat could drop as low as $4.50 or December wheat to touch $4.75. The top end of the contracts' ranges should be about $5.25 for September, assuming a rally in beans and corn comes about.
A lot of negative things would have to happen across the world in order for any type of rally to happen, along with El Niño drying up Australian wheat fields, a continuing wheat disaster in Argentina, and an ongoing rain shortage in the Black Sea Region
But even with all of that happening, there's no surety, as the other places in the world have shored up their domestic wheat production, which is the real mitigating factor in the overall scheme of things.
At best there would be a mild recovery of wheat prices assuming all the above happens, but that doesn't guarantee the U.S. would be getting that business.
Wheat Futures Prices
Wheat futures in the U.S. should continue to go nowhere for some time ahead unless something extraordinary happens where huge losses come about, which could probably only happen in Australia.
Production estimates for wheat continue to increase while demand decreases, cutting back significantly on wheat exports.
The USDA estimated 2009 U.S. wheat production was raised to 2.184 billion bushels from its July estimate of 2.112 billion, while the global wheat crop increased to 659.3 million tons from 656.5 million tons last month. The USDA's estimate for global ending stocks -- or what is left over after supply and demand are accounted for - also increased.
Wheat prices have plunged over the past year as global supplies have increased, and there is little sign of anything changing.
The continuing bearish information strengthened "the prevailing tone of the wheat market - one adrift in search of a persuasive fundamental storyline and dependant upon direction from other commodities," J.P. Morgan analyst Lewis Hagedorn said. "Absent a large decline in Australian production or demonstration of increasing global demand for protein wheat, prices appear likely to continue a gradual downward slide."
CBOT wheat will probably continue to experience new contract lows, although losses will be limited during the medium term by possible strength in CBOT corn and soybeans. Wheat prices should generally remain rangebound during the next couple of months.
Projections are it's possible September wheat could drop as low as $4.50 or December wheat to touch $4.75. The top end of the contracts' ranges should be about $5.25 for September, assuming a rally in beans and corn comes about.
A lot of negative things would have to happen across the world in order for any type of rally to happen, along with El Niño drying up Australian wheat fields, a continuing wheat disaster in Argentina, and an ongoing rain shortage in the Black Sea Region
But even with all of that happening, there's no surety, as the other places in the world have shored up their domestic wheat production, which is the real mitigating factor in the overall scheme of things.
At best there would be a mild recovery of wheat prices assuming all the above happens, but that doesn't guarantee the U.S. would be getting that business.
Wheat Futures Prices
Monday, August 3, 2009
Global Demand for Wheat Down
Wheat Market
Wheat futures continue their downward slide as they are down a whopping 33 percent from the same time last year, and the overall market looks to continue to be bearish, as international demand continues to slide.
“The wheat market is in a slumber,” Stuart Richardson, Australian commodity management spokesman for the Melbourne- based company, said today. “Flour mills around the world have generally entered the new season with greater stocks in their supply line than the year before.
“There is plenty of wheat available competing for limited demand, so the fundamental market picture is bearish,” Richardson added, which updated estimated wheat prices for Australian farmers. “Production risk is diminishing in the northern hemisphere, with the winter wheat harvests almost complete in the U.S. and well advanced in the European Union and Black Sea region.”
For the second month in a row wheat futures have fallen, and wheat speculators and hedge fund managers are increasing their short positions in the golden grain, believing they haven't yet reached their lows.
Wheat Market
Wheat futures continue their downward slide as they are down a whopping 33 percent from the same time last year, and the overall market looks to continue to be bearish, as international demand continues to slide.
“The wheat market is in a slumber,” Stuart Richardson, Australian commodity management spokesman for the Melbourne- based company, said today. “Flour mills around the world have generally entered the new season with greater stocks in their supply line than the year before.
“There is plenty of wheat available competing for limited demand, so the fundamental market picture is bearish,” Richardson added, which updated estimated wheat prices for Australian farmers. “Production risk is diminishing in the northern hemisphere, with the winter wheat harvests almost complete in the U.S. and well advanced in the European Union and Black Sea region.”
For the second month in a row wheat futures have fallen, and wheat speculators and hedge fund managers are increasing their short positions in the golden grain, believing they haven't yet reached their lows.
Wheat Market
Wednesday, July 22, 2009
CBOT Owner Resists Wheat Restrictions
Wheat Markets
The attempt by the government to regulate and interfere with the wheat market could be another disaster in the making, as the completely foolish, misguided and clueless Democrats continue their assault on free markets.
According to Charles Carey, vice chairman of CBOT owner CME Group Inc., government restrictions on trading "are more likely to be harmful to the functioning of our markets than helpful," and he's absolutely right.
The idea that we should have some type of perfection in place so no one ever gets hurt is outrageous, socialist and fascist to the core. Short term fluctations in wheat prices will never last, and that's the illusory problem the goofy Democrats think needs to be solved.
Unbelievably, federal regulators are "seriously considering" restrictions in the wheat futures market being urged by lawmakers concerned over speculation they say has artificially inflated prices, supposedly interfering risk management by farmers and grain processors.
After a wasted year and time, a faux investigation by the investigative panel of the Senate Homeland Security and Governmental Affairs Committee found that the disconnect between the wheat futures and cash markets can mean higher prices for consumers. They say this with a straight face when corn prices and lack of planting of wheat does more to jack up the prices because of other government interference through subsidies from taxpayers dollars.
A number of senators have called on the Commodity Futures Trading Commission to restrict the volume of index trading in the wheat futures market on the Chicago Board of Trade, a completely ridiculous idea.
Foolishly, CFTC Chairman Gary Gensler told the Senate subcommittee at a recent hearing that the agency "is seriously considering this recommendation ... (and) will continue to closely monitor the performance of the wheat futures contract."
Democrat Panel chairman Carl Levin, ignorantly said such a review "is badly needed." Several other members of the committee, representing farm states, voiced concern about the impact of market problems on wheat producers in those states.
Again, to me much of this is to hide the real culprit in wheat prices, federal subsidies of corn for the failing corn-based ethanol industry, which is pushing up prices because of less acreage used for wheat because of the artifical price increases created by the U.S. government.
But an official of the company that operates the Chicago Board of Trade, where wheat futures are traded, opposed such constraints and disputed the Senate probe's findings, as mentiond above from Charles Carey's accurate comments.
The idea of attempting to manipulate the market by the U.S. government and Democrats will fail, as the utopian idea of reducing risk is completely foolish and always fails, and the wheat and commodities markets overall will suffer.
Commodity indexes include futures contracts for delivery in different months. Commodity index traders sell financial instruments whose values rise and fall along with the value of the index on which they are located.
Commodity index traders acquire wheat futures to help offset their risk from selling the instruments to third parties. That pumps billions of dollars into the market and lifts demand and prices for wheat futures, the faulty results of the Senate investigation found.
Other related to the risk factors are also whining about the alleged discrepencies, as one person representing the American Bakers Association and the Sara Lee Corp said at the hearing, "Bakers cannot escape the impact. Today's volatility represents millions of dollars daily in undue financial risk."
What this disingenous bureaucrat doesn't say is this has always been the case, and the those that manage this risk factor are the ones who win. In the stimulous and spirit of bailing out company after company, those that can't compete are attempting to make it look like something unusual is happening, when in fact it has been the practice and way of doing business for a long time.
The one who knows about this the best is Charles Carey, vice chairman of CBOT owner CME Group Inc., and he concludes that the findings of the Senate report "are based on faulty economic analysis and a misunderstanding of basic market economics."
Just look at what the Democrats and Obama are doing to destroy America with its socialist and fascist policies, and you can easily understand how this group of politicians are among the most inexperienced and naive in American history; in both foreign and domestic policy, and they need to just shut up and let the free market work things out, which it always has done.
Wheat Markets
The attempt by the government to regulate and interfere with the wheat market could be another disaster in the making, as the completely foolish, misguided and clueless Democrats continue their assault on free markets.
According to Charles Carey, vice chairman of CBOT owner CME Group Inc., government restrictions on trading "are more likely to be harmful to the functioning of our markets than helpful," and he's absolutely right.
The idea that we should have some type of perfection in place so no one ever gets hurt is outrageous, socialist and fascist to the core. Short term fluctations in wheat prices will never last, and that's the illusory problem the goofy Democrats think needs to be solved.
Unbelievably, federal regulators are "seriously considering" restrictions in the wheat futures market being urged by lawmakers concerned over speculation they say has artificially inflated prices, supposedly interfering risk management by farmers and grain processors.
After a wasted year and time, a faux investigation by the investigative panel of the Senate Homeland Security and Governmental Affairs Committee found that the disconnect between the wheat futures and cash markets can mean higher prices for consumers. They say this with a straight face when corn prices and lack of planting of wheat does more to jack up the prices because of other government interference through subsidies from taxpayers dollars.
A number of senators have called on the Commodity Futures Trading Commission to restrict the volume of index trading in the wheat futures market on the Chicago Board of Trade, a completely ridiculous idea.
Foolishly, CFTC Chairman Gary Gensler told the Senate subcommittee at a recent hearing that the agency "is seriously considering this recommendation ... (and) will continue to closely monitor the performance of the wheat futures contract."
Democrat Panel chairman Carl Levin, ignorantly said such a review "is badly needed." Several other members of the committee, representing farm states, voiced concern about the impact of market problems on wheat producers in those states.
Again, to me much of this is to hide the real culprit in wheat prices, federal subsidies of corn for the failing corn-based ethanol industry, which is pushing up prices because of less acreage used for wheat because of the artifical price increases created by the U.S. government.
But an official of the company that operates the Chicago Board of Trade, where wheat futures are traded, opposed such constraints and disputed the Senate probe's findings, as mentiond above from Charles Carey's accurate comments.
The idea of attempting to manipulate the market by the U.S. government and Democrats will fail, as the utopian idea of reducing risk is completely foolish and always fails, and the wheat and commodities markets overall will suffer.
Commodity indexes include futures contracts for delivery in different months. Commodity index traders sell financial instruments whose values rise and fall along with the value of the index on which they are located.
Commodity index traders acquire wheat futures to help offset their risk from selling the instruments to third parties. That pumps billions of dollars into the market and lifts demand and prices for wheat futures, the faulty results of the Senate investigation found.
Other related to the risk factors are also whining about the alleged discrepencies, as one person representing the American Bakers Association and the Sara Lee Corp said at the hearing, "Bakers cannot escape the impact. Today's volatility represents millions of dollars daily in undue financial risk."
What this disingenous bureaucrat doesn't say is this has always been the case, and the those that manage this risk factor are the ones who win. In the stimulous and spirit of bailing out company after company, those that can't compete are attempting to make it look like something unusual is happening, when in fact it has been the practice and way of doing business for a long time.
The one who knows about this the best is Charles Carey, vice chairman of CBOT owner CME Group Inc., and he concludes that the findings of the Senate report "are based on faulty economic analysis and a misunderstanding of basic market economics."
Just look at what the Democrats and Obama are doing to destroy America with its socialist and fascist policies, and you can easily understand how this group of politicians are among the most inexperienced and naive in American history; in both foreign and domestic policy, and they need to just shut up and let the free market work things out, which it always has done.
Wheat Markets
Sunday, January 25, 2009
Wheat: Argentina Wheat Market Crumbling
Although a number of crops are failing in Argentina, including corn and soy, wheat is also participating in the destructive drought that is crushing the entire agriculture sector of Argentina.
The commodity grain sector hasn't moved with the metals market, as demand for everything is down, even though people still need to eat, as well as their livestock.
This is particularly difficult for Argentina, who is one of the top exporters of grains in the world, and so depend on so much on it for the welfare of the country.
At this time things are so bad that farmers have given up trying to salvage their wheat crop, and instead are focusing on saving their cattle. Even if the cattle are saved, they will be difficult to breed because of the lack of food for them.
According to farmers in Argentina, wheat fields are as dried as they can be, with little hope of salvaging a wheat crop, as there is little to put in storage.
Unfortunately for everyone involved, the wheat planting, wheat yield and wheat harvest around the world has been huge, and so the drought in Argentina is hurting them without benefiting anyone else.
Even though farmers in the U.S. were hoping to get some of the trade usually done by Argentina with Brazil, it looks like it won't have much impact on wheat exports from the U.S., and so Argentines will be the ones to suffer.
So in spite of this, wheat futures aren't moving much because of this, although there was a slight move upward recently based on wheat news from the country. But it's not sustainable.
Weather predictions in the country are, as usual, contradictory, and so some say the drought will end with rain coming, and others say it won't amount to much. Either way, wheat farmers in Argentina, and its people, are in for a long struggle as grain prices continue to fall.
For Argentina, this is the worst year for drought and lack of rain since 1971, and even if there is a major change in the weather patterns, the wheat harvest will be way down, as wheat production grinds to a halt.
Along with the wheat crop, other crops suffering are corn and soy, with silos there to store the crops are in many cases empty or half full.
Even though soy is down, it is still on the positive side, and is projected to increase in production by 7 percent. The corn harvest will fall by about 27 percent, and wheat production will be hit the most from the poor growing season projected to plunge by 44 percent over the 2008-2009 harvesting season.
Grains are so scarce in the country, that the Argentine government is has even lowered the minimum weight requirements to slaughter cattle so the farmers can make some money off them before they are worthless or die.
It'll take some time to recover from this wheat disaster, as Argentina will suffer probably for a couple years or more trying to come back from this natural disaster.
In a normal year this would have boosted wheat prices tremendously, but the wheat harvest has been so plentiful globally, that it will easily absorb the losses without making a difference in wheat prices.
The commodity grain sector hasn't moved with the metals market, as demand for everything is down, even though people still need to eat, as well as their livestock.
This is particularly difficult for Argentina, who is one of the top exporters of grains in the world, and so depend on so much on it for the welfare of the country.
At this time things are so bad that farmers have given up trying to salvage their wheat crop, and instead are focusing on saving their cattle. Even if the cattle are saved, they will be difficult to breed because of the lack of food for them.
According to farmers in Argentina, wheat fields are as dried as they can be, with little hope of salvaging a wheat crop, as there is little to put in storage.
Unfortunately for everyone involved, the wheat planting, wheat yield and wheat harvest around the world has been huge, and so the drought in Argentina is hurting them without benefiting anyone else.
Even though farmers in the U.S. were hoping to get some of the trade usually done by Argentina with Brazil, it looks like it won't have much impact on wheat exports from the U.S., and so Argentines will be the ones to suffer.
So in spite of this, wheat futures aren't moving much because of this, although there was a slight move upward recently based on wheat news from the country. But it's not sustainable.
Weather predictions in the country are, as usual, contradictory, and so some say the drought will end with rain coming, and others say it won't amount to much. Either way, wheat farmers in Argentina, and its people, are in for a long struggle as grain prices continue to fall.
For Argentina, this is the worst year for drought and lack of rain since 1971, and even if there is a major change in the weather patterns, the wheat harvest will be way down, as wheat production grinds to a halt.
Along with the wheat crop, other crops suffering are corn and soy, with silos there to store the crops are in many cases empty or half full.
Even though soy is down, it is still on the positive side, and is projected to increase in production by 7 percent. The corn harvest will fall by about 27 percent, and wheat production will be hit the most from the poor growing season projected to plunge by 44 percent over the 2008-2009 harvesting season.
Grains are so scarce in the country, that the Argentine government is has even lowered the minimum weight requirements to slaughter cattle so the farmers can make some money off them before they are worthless or die.
It'll take some time to recover from this wheat disaster, as Argentina will suffer probably for a couple years or more trying to come back from this natural disaster.
In a normal year this would have boosted wheat prices tremendously, but the wheat harvest has been so plentiful globally, that it will easily absorb the losses without making a difference in wheat prices.
Monday, December 22, 2008
Cold Weather Drives Up Weekly Wheat Prices
With the bulls concerned over the first strong cold weather of the season possibly may damage the dormant wheat crops, prices for the week ended up.
Even though Friday prices were softer, the overall week had KCBT wheat rising by 44.75 cents to $5.83 a bushel, MGE grew by 35.25 cents to $6.2525 a bushel and March CBOT led them all, gaining 50.25 cents to finish the week at $5.6325.
Although there was worries over the weather, a number of meteorologists suggested the cold spell probably wouldn't do enough damage to the crops to make much of a difference. Even so, prices rose on the possibility.
Weather will be especially rough in the central and southern Plains, with below-zero forecasts in the mix. Some of the concern was directed to areas that had little or no snow to protect from the bitterly cold temperatures.
Of course it won't be known until the spring if the dormant crop really had any damage to it, so it's a wait-and-see game at this time.
Spring wheat traded on the MGE hasn't been planted yet.
Even though Friday prices were softer, the overall week had KCBT wheat rising by 44.75 cents to $5.83 a bushel, MGE grew by 35.25 cents to $6.2525 a bushel and March CBOT led them all, gaining 50.25 cents to finish the week at $5.6325.
Although there was worries over the weather, a number of meteorologists suggested the cold spell probably wouldn't do enough damage to the crops to make much of a difference. Even so, prices rose on the possibility.
Weather will be especially rough in the central and southern Plains, with below-zero forecasts in the mix. Some of the concern was directed to areas that had little or no snow to protect from the bitterly cold temperatures.
Of course it won't be known until the spring if the dormant crop really had any damage to it, so it's a wait-and-see game at this time.
Spring wheat traded on the MGE hasn't been planted yet.
Tuesday, October 28, 2008
Good Condition of U.S. Winter Wheat Crop Causes Prices to Drop
The U.S. Department of Agriculture report was so good for wheat, that it has exceeded last year's condition by a whopping 55 percent for the same time frame.
As of October 26, 65 percent of winter wheat was in either good or excellent condition said the USDA report.
With the plethora of wheat available, wheat futures dropped 15.5 cents to $5.14 a bushel on the Chicago Board of Trade.
Much of this abundance came because farmers saw the amazing price of $13.495 a bushel on February 27, and so planted far too much, thinking it would profit them. Unfortunately, they never seem to learn that once the price has elevated to such levels, there was no way it could continue on because of the obvious surge in planting, which would ultimately drive the prices down, as supply increased. That, of course, is what has happened.
Another key factor has been the abundance of rain, which along with the huge sowing, has produced a huge crop.
Global wheat harvests could increase by 11 percent to reach a record of 680.2 million tons. It's also estimated that stockpiles around the world could grow by 21 percent to 144.4 million tons, according to the USDA.
As of October 26, 65 percent of winter wheat was in either good or excellent condition said the USDA report.
With the plethora of wheat available, wheat futures dropped 15.5 cents to $5.14 a bushel on the Chicago Board of Trade.
Much of this abundance came because farmers saw the amazing price of $13.495 a bushel on February 27, and so planted far too much, thinking it would profit them. Unfortunately, they never seem to learn that once the price has elevated to such levels, there was no way it could continue on because of the obvious surge in planting, which would ultimately drive the prices down, as supply increased. That, of course, is what has happened.
Another key factor has been the abundance of rain, which along with the huge sowing, has produced a huge crop.
Global wheat harvests could increase by 11 percent to reach a record of 680.2 million tons. It's also estimated that stockpiles around the world could grow by 21 percent to 144.4 million tons, according to the USDA.
Wednesday, October 15, 2008
Wheat Prices in European Union Fall on Recession Fears
Wheat prices in the European Union fell today, largely tracking the global markets and U.S. grain futures.
The emotional boost from the central banks' PR machine around the world is largely over, and even if bankruptcy on a global scale has been avoided, the fundamentals underlying the problem remain, and most commodities, including wheat, continue to feel the downward pressure as a result.
In Europe, November milling wheat futures dropped by 4 euros to 143.00 euros a ton, as of 1500 GMT on the Euronext.
Wheat futures in London fell as well, as the strength of the British pound against the U.S. dollar and euro is slowing down exports from the country. Wheat exports from Britain are down a huge 42 percent from last year, as competition, along with the stronger sterling hammers the export market.
Italy also experienced a significant drop in wheat prices, as they have fallen between 5-10 euros from last week's close.
There is an abundance of wheat, and that surplus, along with weaker demand, is pushing down prices.
The emotional boost from the central banks' PR machine around the world is largely over, and even if bankruptcy on a global scale has been avoided, the fundamentals underlying the problem remain, and most commodities, including wheat, continue to feel the downward pressure as a result.
In Europe, November milling wheat futures dropped by 4 euros to 143.00 euros a ton, as of 1500 GMT on the Euronext.
Wheat futures in London fell as well, as the strength of the British pound against the U.S. dollar and euro is slowing down exports from the country. Wheat exports from Britain are down a huge 42 percent from last year, as competition, along with the stronger sterling hammers the export market.
Italy also experienced a significant drop in wheat prices, as they have fallen between 5-10 euros from last week's close.
There is an abundance of wheat, and that surplus, along with weaker demand, is pushing down prices.
Tuesday, October 7, 2008
US Wheat Plunges on Economic Fears and Pressure
Commodities continue to take a beating as the markets worldwide become under increasing pressure. Wheat suffered along with most others as they tumbled on all the exchanges.
Along with the economic conditions, other factors were the stronger U.S. dollar and the drop in price of soybeans and corn. A stronger U.S. dollar makes investments in commodities less attractive to foreign traders.
The outlook for 2008 through 2009 looks somewhat grim for wheat, as outside pressures of the global economy continue and the projected record wheat crop drives prices further down.
Along with U.S. wheat production, Canada is raising its wheat production forecast, as are many other countries.
Much of that is because of increased number of acres being planted in wheat as well as expected good weather conditions.
On the Chicago Board of Trade December wheat dropped by 45 cents to $5.95 1/4 a bushel for December. December wheat on the Kansas City Board of Trade fell 42 1/4 cents to $6.28 1/4 a bushel, while December wheat declined by 38 cents to $6.64 3/4 on the Minneapolis Grain Exchange.
Along with the economic conditions, other factors were the stronger U.S. dollar and the drop in price of soybeans and corn. A stronger U.S. dollar makes investments in commodities less attractive to foreign traders.
The outlook for 2008 through 2009 looks somewhat grim for wheat, as outside pressures of the global economy continue and the projected record wheat crop drives prices further down.
Along with U.S. wheat production, Canada is raising its wheat production forecast, as are many other countries.
Much of that is because of increased number of acres being planted in wheat as well as expected good weather conditions.
On the Chicago Board of Trade December wheat dropped by 45 cents to $5.95 1/4 a bushel for December. December wheat on the Kansas City Board of Trade fell 42 1/4 cents to $6.28 1/4 a bushel, while December wheat declined by 38 cents to $6.64 3/4 on the Minneapolis Grain Exchange.
Friday, September 26, 2008
US Wheat Follows Other Commodities Down
With no fresh news on underlying wheat fundamentals, the grain followed other commodities down based on the unsurety of the economic bailout of the financial sector in the U.S.
December wheat at the Chicago Board of Trade fell by 20 1/4 cents to $7.16 a bushel as investors held back with the weekend coming up and the economic uncertainty.
The Kansas City Board of Trade followed suit as it came under pressure as well. December wheat fell by 19 1/2 cents to $7.16 a bushel.
There were also concerns about demand needing to increase after Egypt and Iran decided to acquire wheat from Russia this week.
As usual, the Minneapolis Grain Exchange followed in the footsteps of its CBOT cousin, also experiencing a decline to $7.89 3/4 a bushel, a 16-cent fall.
Traders are looking for direction from the quarterly grain stocks and small grain reports by the U.S. Department of Agriculture at 8:30 a.m. EDT Tuesday. Although an estimate, it'll help give a better picture on the actual usage of the grain.
It is thought at this time that the report will say wheat production for August fell from the expected 2.462 billion bushels originally estimated to 2.459 billion bushels.
December wheat at the Chicago Board of Trade fell by 20 1/4 cents to $7.16 a bushel as investors held back with the weekend coming up and the economic uncertainty.
The Kansas City Board of Trade followed suit as it came under pressure as well. December wheat fell by 19 1/2 cents to $7.16 a bushel.
There were also concerns about demand needing to increase after Egypt and Iran decided to acquire wheat from Russia this week.
As usual, the Minneapolis Grain Exchange followed in the footsteps of its CBOT cousin, also experiencing a decline to $7.89 3/4 a bushel, a 16-cent fall.
Traders are looking for direction from the quarterly grain stocks and small grain reports by the U.S. Department of Agriculture at 8:30 a.m. EDT Tuesday. Although an estimate, it'll help give a better picture on the actual usage of the grain.
It is thought at this time that the report will say wheat production for August fell from the expected 2.462 billion bushels originally estimated to 2.459 billion bushels.
Thursday, August 21, 2008
Wheat Climbs to Eight-week High On Weak Dollar, Surge in Crude Oil
Wheat enjoyed a comeback on Thursday, as it reached an eight-week high, as crude oil helped lift it up, along with a weakening U.S. dollar. Corn and soybean increases also helped push the commodity upwards.
On the CBOT, December wheat ended the session up 22 3/4 cents at $9.22 1/4 a bushel. December wheat at the Kansas City Board of Trade finished at 23 1/2 cents higher at $9.50 3/4, while December wheat at the Minneapolis Grain Exchange ended the session at $9.82 1/4, a 27 1/4 cent increase.
U.S. wheat export demand should remain strong, as weekly export sales for 2008-09 for the U.S. is at a marketing year high of 916,500 tons. The average of 522 million bushels of export wheat sales is about 10 percent above the five-year average. Wheat shipments are running at about 37 percent higher than the five-year average.
On the CBOT, December wheat ended the session up 22 3/4 cents at $9.22 1/4 a bushel. December wheat at the Kansas City Board of Trade finished at 23 1/2 cents higher at $9.50 3/4, while December wheat at the Minneapolis Grain Exchange ended the session at $9.82 1/4, a 27 1/4 cent increase.
U.S. wheat export demand should remain strong, as weekly export sales for 2008-09 for the U.S. is at a marketing year high of 916,500 tons. The average of 522 million bushels of export wheat sales is about 10 percent above the five-year average. Wheat shipments are running at about 37 percent higher than the five-year average.
Tuesday, August 19, 2008
Wheat Outlook and News
US Wheat Review: Slumps In Setback; Consolidation Seen
Wheat Rises as Dry Spell May Curb Australia Crop for Third Year
India May Harvest Record Wheat Crop on Rainfall
Kansas Wheat Report: 2008 Quality Above Average
WA gets new wheat export market
Wheat outlook good in North Dakota
Wheat was once a diplomatic tool
Manitoba crop report: showers delay harvest
Exports of cereals (Romania) climb to 132 million euros
Wheat Rises as Dry Spell May Curb Australia Crop for Third Year
India May Harvest Record Wheat Crop on Rainfall
Kansas Wheat Report: 2008 Quality Above Average
WA gets new wheat export market
Wheat outlook good in North Dakota
Wheat was once a diplomatic tool
Manitoba crop report: showers delay harvest
Exports of cereals (Romania) climb to 132 million euros
Monday, August 11, 2008
Wheat Growers Facing Tough Cost-Control Challenges in 2009
The end of the huge profits for wheat producers may come to an end next year as skyrocketing prices of inputs, in the face of flattening prices, will challenge producers to manage their costs more efficiently than ever.
Prices of almost everything have increased significantly, including fuel, fertilizer, machinery, labor, crop insurance and seed. A number of these inputs have surged by almost 20 percent over the last year. If producers want to add land to the mix, prices have also increased by 19 percent over the last 12 months as well.
As of 2004, breakeven for wheat was around $4 a bushel, in 2009 it's projected to reach over $6.85 a bushel.
Who would have thought that the idea of $7.00 wheat would have profitability challenges, but in 2009 that's a distinct possibility and probability.
How and when producers buy and at what discount may be the difference between profits and losses next year.
Go here for costs and revenue of irrigated and dryland winter wheat over the last ten years, included the projections for 2009.
Prices of almost everything have increased significantly, including fuel, fertilizer, machinery, labor, crop insurance and seed. A number of these inputs have surged by almost 20 percent over the last year. If producers want to add land to the mix, prices have also increased by 19 percent over the last 12 months as well.
As of 2004, breakeven for wheat was around $4 a bushel, in 2009 it's projected to reach over $6.85 a bushel.
Who would have thought that the idea of $7.00 wheat would have profitability challenges, but in 2009 that's a distinct possibility and probability.
How and when producers buy and at what discount may be the difference between profits and losses next year.
Go here for costs and revenue of irrigated and dryland winter wheat over the last ten years, included the projections for 2009.
Wednesday, August 6, 2008
CBOT September Wheat Drops 14 1/4 cents to $7.65 3/4 a Bushel
Even though wheat partook in the plunge in prices of crop cousins soybeans and corn, it still held up pretty good taking all factors into consideration.
September wheat on the CBOT dropped by 14 1/4 cents to $7.65 3/4 a bushel, while Kansas City Board of Trade September wheat dropped 10 1/2 cents to $7.96, and Minneapolis Grain Exchange September wheat rose 1/2 cent to $8.53 3/4.
There were about 3,000 wheat contracts that sold on the CBOT today.
"I think, technically, it's acting fairly well," Alan Brugler, president of Brugler Marketing & Management, said of wheat. "I would attribute most of the selling to fund-type liquidation."
As far as their companion crops, November soybeans fell 47 cents to $12.22, while December corn declined 17 1/4 cents to $5.27 3/4.
September wheat on the CBOT dropped by 14 1/4 cents to $7.65 3/4 a bushel, while Kansas City Board of Trade September wheat dropped 10 1/2 cents to $7.96, and Minneapolis Grain Exchange September wheat rose 1/2 cent to $8.53 3/4.
There were about 3,000 wheat contracts that sold on the CBOT today.
"I think, technically, it's acting fairly well," Alan Brugler, president of Brugler Marketing & Management, said of wheat. "I would attribute most of the selling to fund-type liquidation."
As far as their companion crops, November soybeans fell 47 cents to $12.22, while December corn declined 17 1/4 cents to $5.27 3/4.
Friday, May 2, 2008
Wheat Climbs for First Time in Four Days
For the first time in four days, wheat increased in price, as investors think importers may start to increase acquisitions from the U.S. as wheat prices fave declined.
On Thursday the grain fell to $7.765 a bushel, the lowest price since November 20, 2007. It's also down over 40 percent in price from the record it attained in the latter part of February.
"Below $8 a bushel, we may see some buying interest from importers, who have been delaying purchases," said Kenji Kobayashi, a grain analyst at Kanetsu Asset Management Co.
Sales of U.S. wheat grew by 12 percent this week over last week, as they increased to 176,100 metric tons for the week ending April 24, according to the U.S. Department of Agriculture.
July delivery for wheat gained 2.5 cents, to reach $7.925 a bushel, as of 3:28 p.m. Singapore time. It gravitated from $7.90 and $7.9525 in CBOT after-hours trading.
Even with recent price decreases, wheat is still up by over 65 percent over last year. It reached a high of $13.495 on February 27 before falling back.
On Thursday the grain fell to $7.765 a bushel, the lowest price since November 20, 2007. It's also down over 40 percent in price from the record it attained in the latter part of February.
"Below $8 a bushel, we may see some buying interest from importers, who have been delaying purchases," said Kenji Kobayashi, a grain analyst at Kanetsu Asset Management Co.
Sales of U.S. wheat grew by 12 percent this week over last week, as they increased to 176,100 metric tons for the week ending April 24, according to the U.S. Department of Agriculture.
July delivery for wheat gained 2.5 cents, to reach $7.925 a bushel, as of 3:28 p.m. Singapore time. It gravitated from $7.90 and $7.9525 in CBOT after-hours trading.
Even with recent price decreases, wheat is still up by over 65 percent over last year. It reached a high of $13.495 on February 27 before falling back.
Friday, April 25, 2008
Wheat Down 40 Percent from February High
Since the record price of wheat in February, prices have continued to fall as an expected large harvest has caused the golden grain to fall by 40 percent since the $13.50 a bushel record.
On the Chicago Board of Trade (CBOT) soft red winter wheat has plunged to $8.01 a bushel, the lowest since November 2007.
According to the International Grain Council, wheat will probably reach a record harvest of 645 million tons in 2008-09.
"The big rise in prices in 2007 and early 2008 was a strong incentive to increase the planting of wheat," said Sudakshina Unnikrishnan, an agricultural analyst at Barclays Bank.
"The market is pricing-in expectations of a bigger crop from summer onwards."
Government subidies by the U.S. and Europe for corn-based ethanol has been a major contributor to the price increases, as farmers over the last several years have taken acreage out of wheat production and put it into corn.
Wheat farmers will probably be a year too late to get the huge prices, as their huge harvest will cause price decreases, as is already being factored into the market.
Friday, April 11, 2008
Wheat News Weekend Roundup
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Spring wheat market shows some recovery
Despite a slightly bearish Prospective Plantings Report, the spring wheat market showed signs of recovery in the days following.
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World Wheat Production Boosted This Month, Consumption Trimmed, & Stocks Raised
World wheat production in 2007/08 is projected up 1.7 million tons this month to 606.7 million. The major increase is for Ethiopia, up 1.2 million tons as very good rains boosted yields.
=====
Adani sees wheat output at over 75mt
A bigger wheat crop is crucial to efforts by Prime Minister Manmohan Singh’s government to cool inflation that’s running at a three-year high before next year’s general elections.
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Scientists pit bacteria against fungi to protect wheat
Beneficial flower-dwelling bacteria could soon join the fight against Fusarium graminearum, the fungus that causes Fusarium head blight disease (scab) in wheat, barley and other cereal crops.
=====
Philippines Seeks Wheat Supplies After China Rebuff
The Philippines said China turned down a request to supply wheat, adding to concern that the world faces a worsening shortage of staple foods that has already driven grain prices to records.
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US Wheat Outlook: Seen Mixed On Overnight, CBOT Rebound
U.S. wheat futures are poised to start Friday's day session mixed, with Chicago Board of Trade contracts seen rising in a rebound from losses, traders said.
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Spring wheat market shows some recovery
Despite a slightly bearish Prospective Plantings Report, the spring wheat market showed signs of recovery in the days following.
=====
World Wheat Production Boosted This Month, Consumption Trimmed, & Stocks Raised
World wheat production in 2007/08 is projected up 1.7 million tons this month to 606.7 million. The major increase is for Ethiopia, up 1.2 million tons as very good rains boosted yields.
=====
Adani sees wheat output at over 75mt
A bigger wheat crop is crucial to efforts by Prime Minister Manmohan Singh’s government to cool inflation that’s running at a three-year high before next year’s general elections.
=====
Scientists pit bacteria against fungi to protect wheat
Beneficial flower-dwelling bacteria could soon join the fight against Fusarium graminearum, the fungus that causes Fusarium head blight disease (scab) in wheat, barley and other cereal crops.
=====
Philippines Seeks Wheat Supplies After China Rebuff
The Philippines said China turned down a request to supply wheat, adding to concern that the world faces a worsening shortage of staple foods that has already driven grain prices to records.
=====
US Wheat Outlook: Seen Mixed On Overnight, CBOT Rebound
U.S. wheat futures are poised to start Friday's day session mixed, with Chicago Board of Trade contracts seen rising in a rebound from losses, traders said.
=====
Wednesday, April 9, 2008
U.S. Wheat Closes Mixed - Weather, Nearby Markets Key Factors
U.S. wheat borrowed from its commodity neighbors corn and soybeans on the CBOT, helping it to gains, even though it was the "the weakest link in there, of all the grains," said Larry Glenn, owner of Glenn Commodities. "It's been following."
On the Chicago Board of Trade, May wheat remained at $9.34 a bushel. Minneapolis Grain Exchange May wheat ended at $13.20, a 5 cent increase, and May Wheat on the Kansas City Board of Trade settled 1 cent higher.
Continued forecasts of rain for the U.S. plains dampened expectations for a large, new crop, causing wheat to pull back from its borrowed surge earlier in the day.
According to the U.S. Department of Agriculture, expected supply and demand continues on course U.S wheat carryout, and remains at 242 million bushels; the same as in March.
Some analysts said the data from the USDA had no significant impact on the wheat markets, as weather, along with nearby markets are the what's affecting the wheat market more than anything else.
Another key factor is the expected huge global harvest this year, which could also hinder prices. Others think importers may keep old wheat inventory minimized, while waiting for the new crop to enter the market.
On the Chicago Board of Trade, May wheat remained at $9.34 a bushel. Minneapolis Grain Exchange May wheat ended at $13.20, a 5 cent increase, and May Wheat on the Kansas City Board of Trade settled 1 cent higher.
Continued forecasts of rain for the U.S. plains dampened expectations for a large, new crop, causing wheat to pull back from its borrowed surge earlier in the day.
According to the U.S. Department of Agriculture, expected supply and demand continues on course U.S wheat carryout, and remains at 242 million bushels; the same as in March.
Some analysts said the data from the USDA had no significant impact on the wheat markets, as weather, along with nearby markets are the what's affecting the wheat market more than anything else.
Another key factor is the expected huge global harvest this year, which could also hinder prices. Others think importers may keep old wheat inventory minimized, while waiting for the new crop to enter the market.
Friday, April 4, 2008
The Weekend Wheat News
Wheat outlook and news
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Grant Given to Cornell to Fight Wheat Disease
Bill and Melinda Gates Foundation awards Cornell $26.8 million.
=====
US Wheat Review: Up On Short-Covering; MGE May Rises Limit
U.S. wheat futures ended higher Friday on technical buying and short-covering, with the nearby Minneapolis Grain Exchange contract closing limit-up for the third consecutive day.
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Strength in beans and wheat could not rally corn
Wheat opened higher and closed sharply higher. Minneapolis wheat was limit up again and synthetically trading another $1 higher. This carried the HRW and SRW contracts sharply higher on the day.
=====
Wheat planting up; corn down
The release of the 2008 U.S. Department of Agriculture prospective planting report this week shows wheat acreage up and corn acreage down, which led at least one analyst to predict corn rationing.
=====
Triticum Mosaic Virus adds new wrinkle to wheat disease picture
Kansas wheat producers needing another reason to control volunteer wheat have a new reason for consideration. First found by Kansas State University researchers in 2006, a newly discovered virus affecting wheat was officially recognized and named Triticum Mosaic Virus in 2007.
=====
Wheat Jumps on Weather Concerns
Wheat prices shot up Friday as investors bet that a mix of wet and dry weather in wheat-growing U.S. states will damage crops and tighten supplies of the grain used to make bread, pasta and other foods.
=====
Wheat Acres
The USDA reported planting intention estimates on Monday, March 31. The highly anticipated report held little in the way of major surprises, but the current supply situation and high prices require market participants to look at this report with a great deal of scrutiny. While it appears the marketplace has quickly forgotten about the bearish aspects of the report, market participants will continue to measure factors such as domestic and global demand and weather problems against the potential wheat production set forth by this report.
=====
Wheat rated in mostly fair to good condition
Winter wheat was 9 percent pastured last week, with the crop rated in mostly fair to good condition.
=====
=====
Grant Given to Cornell to Fight Wheat Disease
Bill and Melinda Gates Foundation awards Cornell $26.8 million.
=====
US Wheat Review: Up On Short-Covering; MGE May Rises Limit
U.S. wheat futures ended higher Friday on technical buying and short-covering, with the nearby Minneapolis Grain Exchange contract closing limit-up for the third consecutive day.
=====
Strength in beans and wheat could not rally corn
Wheat opened higher and closed sharply higher. Minneapolis wheat was limit up again and synthetically trading another $1 higher. This carried the HRW and SRW contracts sharply higher on the day.
=====
Wheat planting up; corn down
The release of the 2008 U.S. Department of Agriculture prospective planting report this week shows wheat acreage up and corn acreage down, which led at least one analyst to predict corn rationing.
=====
Triticum Mosaic Virus adds new wrinkle to wheat disease picture
Kansas wheat producers needing another reason to control volunteer wheat have a new reason for consideration. First found by Kansas State University researchers in 2006, a newly discovered virus affecting wheat was officially recognized and named Triticum Mosaic Virus in 2007.
=====
Wheat Jumps on Weather Concerns
Wheat prices shot up Friday as investors bet that a mix of wet and dry weather in wheat-growing U.S. states will damage crops and tighten supplies of the grain used to make bread, pasta and other foods.
=====
Wheat Acres
The USDA reported planting intention estimates on Monday, March 31. The highly anticipated report held little in the way of major surprises, but the current supply situation and high prices require market participants to look at this report with a great deal of scrutiny. While it appears the marketplace has quickly forgotten about the bearish aspects of the report, market participants will continue to measure factors such as domestic and global demand and weather problems against the potential wheat production set forth by this report.
=====
Wheat rated in mostly fair to good condition
Winter wheat was 9 percent pastured last week, with the crop rated in mostly fair to good condition.
=====
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