Short wheat?

[TWI]

I would be careful of any grain longs coming into year end, the prices have diverged so far from cash it is starting to look rediculous.

 

[RichieE]

I would be careful of any grain longs coming into year end, the prices have diverged so far from cash it is starting to look rediculous.

Did you see the FT today? There was an article about the price of softs and the cutting of import taxes on grains, wheats etc

 

[TWI]

I did not see the article actually. Sounds bullish.
Next year I will likely be a long in Soy and Corn but shorting new crop wheat. Rather like the idea of doing a long Z8 corn short Z8 wheat trade. Expect soybeans to get up into the 1400 area.
Other thing that is right out of line right now is the N/Z corn it is about 7c back..nuts, it should go to around full carry.

 

[trader_dante]

I did not see the article actually. Sounds bullish.
Next year I will likely be a long in Soy and Corn but shorting new crop wheat. Rather like the idea of doing a long Z8 corn short Z8 wheat trade. Expect soybeans to get up into the 1400 area.
Other thing that is right out of line right now is the N/Z corn it is about 7c back..nuts, it should go to around full carry.

I'm out of Wheat now. I came in at 767 in December and rolled it at 802 which entered me in March at 824. I built a large position, exiting it all at 924 on a sign the market was reversing. It has been my single biggest win so far

I am now turning bearish on Wheat after yesterdays technical setup and expect it to break sharply.

 

[TWI]

Best way to play wheat may be to sell the K8/N8 spread which has blown out massively the last couple of weeks and already put a few traders onto the street. I think that now the stops have been squeezed this one could be a winner , got to have balls to short it however, wouldn't want it to ruin christmas.

 

[RichieE]

I did not see the article actually. Sounds bullish.

Here you go...

Import tariffs slashed as food inflation bites
By Javier Blas in London

Published: December 17 2007 02:00 | Last updated: December 17 2007 02:00

Import tariffs for big agricultural commodities, in particular cereals, vegetable oils and rice, are being slashed in an effort by developed and developing countries to cushion their local markets against rising food inflation.

The move comes as food inflation, which hit over the summer, shows signs of resurgence, with cereal prices rising sharply, boosted by strong demand and tumbling inventories.

Turkey is the latest country to announce a reduction in custom duties, having recently cut its import tariff for wheat from 130 per cent to 8 per cent, for corn from 130 per cent to 35 per cent and scrapped the previous 100 per cent duty for barley.

The European Union - the world's top importer of wheat and one of the largest buyers of soyabean and corn - has also announced it will set zero import duties for cereals until June.

This follows cuts in countries such as China, Russia, Mexico, Morocco, Azerbaijan, Bosnia, Egypt, Philippines, Taiwan, Bangladesh, India, Nigeria, Ghana and Peru. Some have said these will be short-term measures.

Ali Arslan Gurkan, head of the commodity market division at the UN's Food and Agriculture Organisation in Rome, said the tariff cuts were the latest sign that policymakers were trying to cope with rising food costs.

"Governments are finding it politically inevitable to reduce local food prices and this situation is likely to continue," Mr Gurkan said.

This year, Morocco cut its wheat import tariff from 130 per cent to 2.5 per cent after suffering a drought that halved its own crop. China has cut its soyabean import tariff from 3 to 1 per cent in an effort to increase local supplies after rising food costs pushed inflation to its highest rate in 11 years. The cut has boosted imports and pushed the oilseed crop price to a 34-year record.

Russia will cut its import tariff for soya oil and rapeseed oil from 15 per cent to 5 per cent this month, while Nigeria is set to slash its rice import tax from 100 per cent to just 2.7 per cent at the beginning of next year.

Sorin Vasloban, of the Paris-based cereal trading house Plantureux, said: "The prices of agricultural commodities have stabilised at very high levels and countries need to resort to these measures [cutting tariffs] to control inflation."

But the reduction in import tariffs has been offset by higher export tariffs - which aim to keep local markets well supplied - in several key exporting countries.

Argentina this month joined the path taken earlier by Russia and Kazakhstan.

The tariff cuts will not have an impact on the Doha trade talks, as they apply to bound tariffs - the legal upper limits - rather than applied duties.

The latest tariff cuts come as cereals and soyabean prices climb to new highs propelled by a warning by the US Department of Agriculture this month that unabated demand from emerging countries is denting inventories dramatically.

In Chicago, wheat futures for March 2008 delivery rose to an all-time high of $9.79½ a bushel, just below the summer's all-time high, $9.61¾. March corn futures moved to $4.38¼ a bushel, within a whisker of a 11-year high.

 

[Mr Spud]

anyone else trading this....been holding longs since september ....had to ride some pretty severe reversals but currently long on an average price of 935 for March ...just wish I'd had the balls to put more on...limit up 6 sessions in a row !

 

[trader_dante]

anyone else trading this....been holding longs since september ....had to ride some pretty severe reversals but currently long on an average price of 935 for March ...just wish I'd had the balls to put more on...limit up 6 sessions in a row !

I caught the huge rally from November to December but was out as the sideways range started.

It's an incredible market and I expect it to go a lot higher.

Good luck.

 

[Mr Spud]

I caught the huge rally from November to December but was out as the sideways range started.

It's an incredible market and I expect it to go a lot higher.

Good luck.

well they shook my tree and made me fall !
stop loss kicked in at 1075
got a buy order in for a pull back to 1010 area ....not sure if i'm likely to be filled though

 

[tar]

mmm .. my gut feeling says its going 200 cents south !!

 

[tar]

mmm .. my gut feeling says its going 200 cents south !!

 

[Mr Spud]

good call tar ...on the 7th Mar July closed at 1068 ...on the 12 March it peaked at 1272.50 ..200 points north ! THEN it went south how many times have we been right about the market but oh so wrong on the trade ! ..beeen trying to catch a few knives all the way down ...not entirely convinced the bottom is in but from a fundamental viewpoint with world carry over stocks historically low it wont take much to put a firework back under this market ...I'm not convinced this situation can be resolved by one good year ...I'm back in at 748....

 

[tar]

good call tar ...on the 7th Mar July closed at 1068 ...on the 12 March it peaked at 1272.50 ..200 points north ! THEN it went south how many times have we been right about the market but oh so wrong on the trade ! ..beeen trying to catch a few knives all the way down ...not entirely convinced the bottom is in but from a fundamental viewpoint with world carry over stocks historically low it wont take much to put a firework back under this market ...I'm not convinced this situation can be resolved by one good year ...I'm back in at 748....

I gave hint about the exit point target without mentioning the entry point nor the stoploss point :idea:

 

[Mr Spud]

I gave hint about the exit point target without mentioning the entry point nor the stoploss point :idea:

and it was a good call ! at the time I thought it was going to the moon ... any thoughts about it now ? ...my gut feeling is we havent seen the end of the rally ..it reversed off the contract high at 1350 like it had hit railway buffers..interesting also that I read somewhere that Goldman Sachs had given a prior target of 1350 for it ...looks like some big sell orders triggered there .. its my opinion there's trade waiting to be done above there at some point ...we've filled in all the gaps now that were left on the first rally up .then again I'm probably just talking my book as usual !

 

[tar]

and it was a good call ! at the time I thought it was going to the moon ... any thoughts about it now ? ...my gut feeling is we havent seen the end of the rally ..it reversed off the contract high at 1350 like it had hit railway buffers..interesting also that I read somewhere that Goldman Sachs had given a prior target of 1350 for it ...looks like some big sell orders triggered there .. its my opinion there's trade waiting to be done above there at some point ...we've filled in all the gaps now that were left on the first rally up .then again I'm probably just talking my book as usual !

I think there is no rally in the short term

 

[tar]

look here
Bloomberg.com: Worldwide

 

[tar]

I think oil the same story big rally then sell off maybe 30%

 

[Mr Spud]

inclined to agree with you ref wheat ...I think the market needs time to work off the fall
oil does look like wheat did back in march a 30% fall could easily happen

 

[BREND]

seems like wheat is in a bubble stage now.