Wheat

[salpal]

Has anybody noticed the sudden rise of wheat - I am watching London Wheat offered by Ig Markets Nov contract and it has really started to move

 

[Pager]

CBOT wheat futures in Chicago put on US$60 last night, that's US$3000 per contract.

Wheat is highly volatile at the moment, if you want to trade it maybe look at spreads, they will reduce your risk but can still sting.

If bullish look at Selling July 09 and buying March 09, When March becomes the front month reverse the position, when Wheat was going bonkers last year that spread really blew out, if however Wheat takes a dive then that spread will quickly go the other way but at a lot slower rate than an outright buy position, same of course is true if it goes bonkers again you would be far better off with the outright buy.

I put this spread on a few weeks ago but was too early, Wheat took a dive and i got out at breakeven, too early to say Wheats bottomed but it has fallen along way from its highs which although breif were about double its current price.

After its big price run up just about every farmer with the right soil/planting conditions has been busy cultivating the stuff and a record crop is expected but any bad news or weather and Wheat will remain very volatile.

 

[wayneL]

Beans and Corn limit up too.

 

[Temjin]

I've been waiting for the grains to bottom down. Likewise, I entered too early a few weeks ago and was stopped out.

However, I got back in corn and wheat just 2 days ago. It's quite volatile so my stop loss is quite far away, thus, I'm not expecting a high R return on these trades. (maybe just 2-3 at most)

 

[The Once-ler]

Wheats simply following corn. The corn crop is being downgraded by the hour in the US as the floods take their toll. It's either too late now to replant or the yield will be half. Still time to plant beans, but soon that will be finished as well.

Wheat should not be worth less than corn, so wheat is going up with corn.

The US corn crop will now be 30 million tonnes less than last year.

 

[ithatheekret]

For those that have been following our IPL , you may be interested in a couple of US stocks that I feel have the same prospects . I know Chops has been following one , POT , but there's another IPI .

Cheers

 

[MRC & Co]

Yeh, POT has been consolidating around it's previous high from a few weeks back. Hit new highs yesterday, but didn't look convincing, tonight looks a lot better!

I think IPL is headed for a similar fate this coming week.

Thx for the IPI idea, is it a new float? Chart won't show data longer than a few weeks back..........

 

[ithatheekret]

Thx for the IPI idea, is it a new float? Chart won't show data longer than a few weeks back..........

Yup , same old rules apply though , watch wait and plan your own entry and exit strategies .

The way ones going it could be the next holy Nellie in capitalization , the currency arbitration can be a pain in the rear though .

I watched Google soar past 3M and was gobsmacked , could happen again , ya neva know ............. weirder things have happened B .... B ... Barrick

 

[Investor123]

Wheat may fall on speculation that record global production will outpace demand, boosting grain inventories.

Growers worldwide will collect 670.8 million metric tons in the year ending May 31, up 9.9 percent from the prior year, the U.S. Department of Agriculture said last month. Global stockpiles will increase 18 percent to 136.2 million tons, the USDA said.

Basically the world is awash in wheat supplies.

Dir Mvmt Index signal SELL on the Daily chart

Shorted 1 lot of Wheat Dec 08 at 755.00
Stop level at 793.00
Target level at 720.00

 

[Investor123]

Wheat may fall on speculation that record global production will outpace demand, boosting grain inventories.

Growers worldwide will collect 670.8 million metric tons in the year ending May 31, up 9.9 percent from the prior year, the U.S. Department of Agriculture said last month. Global stockpiles will increase 18 percent to 136.2 million tons, the USDA said.

Basically the world is awash in wheat supplies.

Dir Mvmt Index signal SELL on the Daily chart

Shorted 1 lot of Wheat Dec 08 at 755.00
Stop level at 793.00
Target level at 720.00

On 5 September I had shorted 1 lot of Wheat Dec 08 at 755.00, stop level at 793.00, target level at 720.00.

Wheat fell, extending a slump to a three-month low, on speculation that record global production will outpace demand, boosting grain inventories.

Growers worldwide will collect 670.8 million metric tons in the year ending May 31, up 9.9 percent from the previous year, the U.S. Department of Agriculture said last month.

Currently Wheat Dec 08 contract is trading at 732.40, unrealised profit is US$1130 (value of $1 is US$50).

The perception is the world crop is getting bigger. US Dollar strengthening has also helped to push wheat price lower.

 

[Investor123]

In the current environment, Europe, UK, Australia, New Zealand are all cutting interest rate, while US is done with its cut. So base on interest rate differentiate, USD appreciates against EUR, GBP, AUD, NZD. This is bad for commodities in general.

 

[Investor123]

On 5 September I had shorted 1 lot of Wheat Dec 08 at 755.00, stop level at 793.00, target level at 720.00.

Currently Wheat Dec 08 contract is trading at 729.40, unrealised profit is US$1280 (Value of $1 is US$50).

Wheat declined after the dollar gained to a one-year high yesterday against six major currencies as the U.S. government took over Fannie Mae and Freddie Mac, boosting confidence in the world's largest economy. Corn and soybeans also fell as oil's decline eroded the appeal for the crops as alternative fuel.

Six years ago, analysing commodities is about tracking its supply and demand situation. Three years ago, analysing commodities involve tracking what are the hedge funds trading. Now analysing commodities involve knowing where is the next direction of US Dollar going to be.

 

[wayneL]

On 5 September I had shorted 1 lot of Wheat Dec 08 at 755.00, stop level at 793.00, target level at 720.00.

Currently Wheat Dec 08 contract is trading at 729.40, unrealised profit is US$1280 (Value of $1 is US$50).

Wheat declined after the dollar gained to a one-year high yesterday against six major currencies as the U.S. government took over Fannie Mae and Freddie Mac, boosting confidence in the world's largest economy. Corn and soybeans also fell as oil's decline eroded the appeal for the crops as alternative fuel.

Six years ago, analysing commodities is about tracking its supply and demand situation. Three years ago, analysing commodities involve tracking what are the hedge funds trading. Now analysing commodities involve knowing where is the next direction of US Dollar going to be.

Why not just trade DX then?

 

[Investor123]

Why not just trade DX then?

DX is currency trading which I had already participated. Just took my profit on USDJPY, see USDJPY thread.

USD is just one of the factor to look at when trading commodities. Commodities provide more data that gives the trader more information on where the direction is going, ie planting areas, CFTC data, hedge funds' option positions.

 

[Investor123]

Wheat Traders Trim Bets on Price Rise, CFTC Data Shows

Hedge-fund managers and other large speculators decreased their net-long position in Chicago wheat futures in the week ended Sep. 2, according to U.S. Commodity Futures Trading Commission data.

Speculative long positions, or bets prices will rise, outnumbered short positions by 985 contracts on the Chicago Board of Trade, the Washington-based commission said in its Commitments of Traders report. Net-long positions fell by 5,447 contracts, or
85 percent, from a week earlier.

This report confirms that my bearish view on wheat is correct.

 

[wayneL]

DX is currency trading which I had already participated. Just took my profit on USDJPY, see USDJPY thread.

USD is just one of the factor to look at when trading commodities. Commodities provide more data that gives the trader more information on where the direction is going, ie planting areas, CFTC data, hedge funds' option positions.

Agreed, but you said:

Now analysing commodities involve knowing where is the next direction of US Dollar going to be.

So it's not just about the US dollar then?

 

[Investor123]

Agreed, but you said:



So it's not just about the US dollar then?

Now analysing means looking at:

fundamental
hedge funds position
USD direction

 

[Investor123]

On 5 September I had shorted 1 lot of Wheat Dec 08 at 755.00, stop level at 793.00, target level at 720.00.

Currently Wheat Dec 08 contract is trading at 729.40, unrealised profit is US$1280 (Value of $1 is US$50).

Wheat declined after the dollar gained to a one-year high yesterday against six major currencies as the U.S. government took over Fannie Mae and Freddie Mac, boosting confidence in the world's largest economy. Corn and soybeans also fell as oil's decline eroded the appeal for the crops as alternative fuel.

Six years ago, analysing commodities is about tracking its supply and demand situation. Three years ago, analysing commodities involve tracking what are the hedge funds trading. Now analysing commodities involve knowing where is the next direction of US Dollar going to be.

On 5 September I had shorted 1 lot of Wheat Dec 08 at 755.00, stop level at 793.00, target level at 720.00.

Wheat price fell below 720, so position is closed. Profit is US$1750 (value of $1 is US$50).

 

[cartel31]

It's quite interesting to see the price of wheat come down.

I would have thought that in these market conditions, with the financial chaos about to start world wide that people in poorer countries would obviously direct their income towards wheat products such as bread.

The economic slowdown will no doubt have a lot of people worldwide losing jobs. Would you think that wheat would be increasing n price soon?

 

[CanOz]

It's quite interesting to see the price of wheat come down.

I would have thought that in these market conditions, with the financial chaos about to start world wide that people in poorer countries would obviously direct their income towards wheat products such as bread.

The economic slowdown will no doubt have a lot of people worldwide losing jobs. Would you think that wheat would be increasing n price soon?

I think that if the USD tanks again then commodities, wheat included, will rise in price.

The rest is really up to the fundamental supply / demand situation with wheat. Generally if the wheat price is up for long then more crop is sowed. Providing there are no natural disasters there will be a surplus and prices may fall.

Cheers,


CanOz