Large shadow in the wheat market

[Palouser]

Because of dryness and lack of development Black Sea wheat is at risk of a cold winter that is already settling in. This is seen as the biggest threat since 2009 when Russia finally established national stores to cover bad years for milling wheat.

The area can producer a lot of wheat but I've always maintained that it can't do it reliably and will always be 2nd fiddle in that regard.

I expecteded poor market prices to last well into spring but, by the time China imports another record in soybeans, and the corn gets out of the field it appears the complexion and perspective of the market  will be different than expected.

[Jameshh1964]

Whoa....hard to swim through the grammar in that last paragraph Palouser! Lol.....

[Palouser]

That's what happens when I write and run! Thanks. I edited a bit.

[Jameshh1964]

Thanks, sorry to pick on you. I think we are going to significant increases in wheat prices for the same reasons you earlier delineated. The quality is just not up to par and there are some looming yield issues.
Though I am in the organic market, this is the first year I have seen SWW prices higher than DNS.

[Palouser]

You can pick on me all you want. Been in this game long enough and know all the angles. Seen it all, done it all

[Jameshh1964]

Say Palouser,
I'll be at the Oregon Wheat Growers League meeting in Ontario December 2nd, I've been asked to give a little talk. Why don't you drive down and say howdy?

[glenlivet18]

Pal, were you around for the 2007-08 monster rally in Minneapolis spring wheat?  I'd love to hear some stories about that market.

For such small volume, wheat can make some big moves. Wouldn't be a bad market to speculate in if one knew what they were doing.

[Jameshh1964]

Glen,

I'm sure I was alive in 2008, but I did not hold the same position I do now.  My point about the Organic wheat was that the quality issues usually paralell the conventional wheat quality to a large degree.  Though it is a smaller market, it is still market driven.  The pricing set for our growers is much more predictable and stable, but the contract prices are still based on recent spot market prices.  I'm not sure how large the Organic market has to be not to be considered a niche market.  It was about 38 billion dollars worth in the USA last year.

In any event, we strive to treat our farmers as fairly and as transparently as possible.  I have a very fun and satisfying job and enjoy coming to work each day.

[Palouser]

Really not a lot to say about the wheat market in 2007*8 except that I predicted it based on the obvious inventory/production trends and was roundly criticized for not recognizing that the market was always right and that JIT delivery couldn't produce more wheat at a moments notice.

This was the final nail in the coffin that the industrial economic model was sufficient to explain the ag economic model. It can't and never will subsitute because food isn't widgets and weather isn't conducive to factory settings - which may be the important factor in the future of this year's market.

But I must say my heyday was taking on the policy arguments of F2F2 after realizing the original F2F was a fantasy and a nightmare brought on by the marraige of politics and ag economists supporting them in the hopes of more grant money. Agribiz jumped in and told farmers what policies they needed for a free market and twisted economic logic into a pretzel.