4course
Member
- Location
- north yorks
seems the cereal market has got that feel of could go either way ,anyone a view? ,at the moment im inclined to hold what we have left and sell a bit along the way
thats two of us and more besides as im getting conflicting advice/opinions from who ever I talk to but im thinking holding wont be a grave mistakeSeems to have been floating along at about £140 spot feed wheat for most of the season now. If you're prepared to go to the end with most of your wheat unsold you're a braver man than me.
Our wheat seems expensive if we need to export but it's a long time till harvest and a lot can happen
Truth is I haven't a bloody clue!
Sell physical and take a call option. Your physical sale protects your from a falling market and the option against a rising market.thats two of us and more besides as im getting conflicting advice/opinions from who ever I talk to but im thinking holding wont be a grave mistake
I know feck all about grain markets.
Disclaimer - I know feck all about grain markets. My rolling average of sales (85% of old crop priced) are a few quid under the current spot market which is hardly at its peak anyway. I'm typing this in a farm office in Dorset, not a beach on Necker Island so my advice is what you've paid for it i.e. diddly squat!
Global stocks are massive, so no major price upsets unless currency shifts in a big way IMHO.
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Source: http://www.igc.int/en/markets/marketinfo-sd.aspx
Ok, so the stocks-to-use ratio is 23.5% which isn't excessive but you won't see much price volatility until it dips well below 20%. Within the total grains stats you've got different levels for wheat vs maize, oilseeds etc. The story for wheat is worse - 33.5% stocks-to-use with little voltility until you drop to 20%. Stocks of wheat are still building, it's only maize that is coming down a bit.
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Conclusion? Sideways market for the time being. Sell into rallies as the £ will fluctuate with economic & Brexit news. IMO there might be a bit of upside in milling wheat & malting barley as 2017 harvest quality wasn't great in the South. Lots of quality grain heading for the feed bins around here.
Disclaimer - I know feck all about grain markets. My rolling average of sales (85% of old crop priced) are a few quid under the current spot market which is hardly at its peak anyway. I'm typing this in a farm office in Dorset, not a beach on Necker Island so my advice is what you've paid for it i.e. diddly squat!
I like your positivity.....Thats only half of the story.
Follow the 'world stocks' line on the graph, and anything other than a global record crop (scenario 'A') will reduce stocks. Scenario C, a 3 year low, will see world stocks back where they were in 2012. Add to this that Chinese stocks are Chinese stocks, (i.e. they're not selling anything back into the world market) and thats if they actually exist at the level the rest of the world guesses at. The last thing anyone would do in a high stakes game would be to show their position, and China would rather bluff from a position of weak stocks than tell the truth, and spook the market into another 2012 price spike.
So in answer to the OP: Bullish, with bells on.
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Do you not think that there's a pattern where demand follows production and therefore the effect on stocks of scenarios B&C would be less pronounced?Thats only half of the story.
Follow the 'world stocks' line on the graph, and anything other than a global record crop (scenario 'A') will reduce stocks. Scenario C, a 3 year low, will see world stocks back where they were in 2012. Add to this that Chinese stocks are Chinese stocks, (i.e. they're not selling anything back into the world market) and thats if they actually exist at the level the rest of the world guesses at. The last thing anyone would do in a high stakes game would be to show their position, and China would rather bluff from a position of weak stocks than tell the truth, and spook the market into another 2012 price spike.
So in answer to the OP: Bullish, with bells on.
View attachment 620400