clancey
14-12-2005, 01:29 am
The following comments are from from my websites, http://www.statpub.com and http://www.reportonfarming.com I thought it was interesting to see the big boys in Chicago talking up wheat:
Future markets are starting to see short covering on massive longs assembled by speculators and funds through the harvest period. This is adding support to corn and soybean markets, despite the belief by some market analysts in mathematical formulas which say they are over valued.
Short covering was evident in corn and soybeans on Friday and yesterday, leaving analysts at the Chicago Board of Trade (CBOT) to quip, "Traders who have wanted to be short are already short and the market lacked much in the way of scale-up selling."
This could finally spill over into wheat, the CBOT analysts speculate. "It may not take much in the way of higher price action to spark more buying from speculators, as the record net short position of the speculator combined with potentially threatening weather for next week could spark a significant short covering trend into the end of the year"
"Ending stocks are relatively tight, and even a minor weather problem could raise supply fears for the 2006-07 season. The trade still expects a world production deficit for this season, and winter plantings in the northern hemisphere (next season's crop) were thought to be down about 2% and crops in the Ukraine and Russia look much smaller next year due to poor weather for planting.
"Unlike the other grains, the wheat world report showed an increase in world consumption and an increase in world trade from last month. World consumption was revised higher by about 2 million MT to 622 million for the 2005-06 season from 608.7 million last year and 588.5 million two years ago. Markets that could see a world production deficit, increased interest from fund traders and increased world trade are considered prime candidates for funds to accumulate long positions in 2006."
Future markets are starting to see short covering on massive longs assembled by speculators and funds through the harvest period. This is adding support to corn and soybean markets, despite the belief by some market analysts in mathematical formulas which say they are over valued.
Short covering was evident in corn and soybeans on Friday and yesterday, leaving analysts at the Chicago Board of Trade (CBOT) to quip, "Traders who have wanted to be short are already short and the market lacked much in the way of scale-up selling."
This could finally spill over into wheat, the CBOT analysts speculate. "It may not take much in the way of higher price action to spark more buying from speculators, as the record net short position of the speculator combined with potentially threatening weather for next week could spark a significant short covering trend into the end of the year"
"Ending stocks are relatively tight, and even a minor weather problem could raise supply fears for the 2006-07 season. The trade still expects a world production deficit for this season, and winter plantings in the northern hemisphere (next season's crop) were thought to be down about 2% and crops in the Ukraine and Russia look much smaller next year due to poor weather for planting.
"Unlike the other grains, the wheat world report showed an increase in world consumption and an increase in world trade from last month. World consumption was revised higher by about 2 million MT to 622 million for the 2005-06 season from 608.7 million last year and 588.5 million two years ago. Markets that could see a world production deficit, increased interest from fund traders and increased world trade are considered prime candidates for funds to accumulate long positions in 2006."