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sw363535
Honored Advisor

Wheat:::::::: Is this manipulation message?

http://www.reuters.com/article/2012/12/11/usda-crop-production-idUSL1E8NB25X20121211

 

This article says the opposite of how I read the frutures market.  If stocks are swelling why is new crop wheat bid higher than old crop this time of year?

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9 Replies
Hobbyfarmer
Honored Advisor

Re: Wheat:::::::: Is this manipulation message?

This looks a lot like an updated dusted off copy and paste job from last spring ... just the names and dates changed to protect the...

 

Keep the masses calm, cool, and collected. Mass hysteriea is not good for the polititions or farmers.

 

Kind of looks like a carrot on a stick in front of the donkey to keep it moving.

 

 

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rayjenkins
Veteran Advisor

Re: Wheat:::::::: Is this manipulation message?

when the soft red stocks to use ratio is close to 50%

 

you are likely to have a carry in the futures market

 

and you know the old saying---there's another wheat crop coming on somewhere in the world every 6-8 weeks

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giolucas
Veteran Advisor

Re: Wheat:::::::: Is this manipulation message?

MY TAKE AWAY FROM THE ARTICLE:

The agency pared its estimate of soybean ending stocks by 10 million bushels to a bare-bones 130 million bushels, the lowest in 9 years but in line with estimates. That is the result of a 10-million-bushel increase in the projected crush on the back of unexpectedly strong soyoil and soymeal export sales. "On soybeans, 130 million (bushels) is basically pipeline stocks," said Jim Gerlach, president of A/C Trading
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sw363535
Honored Advisor

Re: Wheat:::::::: Is this manipulation message?

Yes Gio I saw that also.  Thought it might just be thrown in there to make the report sound a bit more official(the soy part)

 

Wheat part bothered me since 2010 was the last good HRW crop reported anywhere.  I understand what you say Ray and I suppose it might look that way if spring wheat were the primary crop considered.  But there are some pretty strong statements there that cannot be true on an overall view.

My emotion and timing made the news release look like an attempt to drive wheat price down while the chance is there.

 

Thanks Hobby, I also have doubts when I cannot see data that supports big claims.  Motivation is my next ?????

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ray h.
Senior Contributor

Re: Wheat:::::::: Is this manipulation message?

     So,if there is any truth in the #s,why did not wheat fall by at least half limit?

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sw363535
Honored Advisor

Re: Wheat:::::::: Is this manipulation message?

Yip,  15 years ago when we didn't pay any attention to global numbers I might have swallowed it.  But I am spittin' the hook on this one.  Palouser has a better feel for the overall wheat data than I do. But this looks like promotion to me.

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Palouser
Senior Advisor

Re: Wheat:::::::: Is this manipulation message?

A month to month difference in reporting can sound a lot like a yearly surprise - but it's not.

 

Exporting countries wheat supplies are dropping nearly 30% this marketing year.

 

As far as I know the latest reports from both China and Australia are controversial at best with guesses at lower production than originally forecast - but maye somebody got it all settled Smiley Very Happy 

 

An increase in estimates of Chinese production of wheat is almost immaterial since their wheat will not enter global trade and there weren't expectations of much Chinese imports. Though they are importing from Canada, not to mention Aussie wheat they have been takling for feed this last year.

 

According to the last IGC estimates global wheat production fell 5% this year from last and consumption a bit over 2%.

 

The trouble with a month by month change in estimates is that there isn't enough context for a  solid general conclusion. Doesn't mean there won't be one however.

 

 

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sw363535
Honored Advisor

Re: Wheat:::::::: Is this manipulation message?

Smiley Happy      You forgot the smiley at the end, Palouser.......  I got mine on after that last statement.  Am going to chuckle on that one for a day or so.  Maybe keep the smile till the next monthly one comes out. Smiley Happy

 

 

 

 

your sooooooooooooooo right!!!!!!!!!!!!!!!!!!!!   CBOT read Palousers last sentence.

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pritchh
Senior Contributor

Re: Wheat:::::::: Is this manipulation message?

In bull markets, its demand and production troubles driving.

In bera markets its always someone manipulationg!!!

Or--

Wheat is acting like markets do, when worry builds, prices rise as endusers move to lock more in and producers hld tighter – it isn’t endless, it manifests by allocating limited supplies. Markets don’t wait until the last day of the marketing year to peak in tightness, it happens long before when emotions are highest. The market gauges what it needs until the next crop comes. It doesn’t assume a large new crop nor small but average, it’s the only answer at that point. Zooming C and S psychology probably contributed to the last yr’s wild highs. Market was over log long ago.

Going back a few months, we look ahead to new crop and its price. Old crop  tends to fall away once rationed, s the still long sit and sit and finally let go.

High prices invite high production and assuming Mother Nature cooperates to a reasonable degree, prices are doomed for a couple of years.

Producers can earn some carry or thoughtful specs can earn the carry and decline for old crop not yet sold.

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