For wheat market, the harvest time is coming in Australia (2).but it is expected to be low, so stronger demand is expected. The USDA reports support that the wheat demand of feed use is increasing from 315 million bushels of wheat from 220 million. As well, according to the agriculture ministry in Argentina, it expects its 2012-13 wheat production to be likely 11.5 million tons, down sharply from the 13.2 million ton last season (1). Argentina, a leading global wheat exporter, is going to affect price. I expect that since future harvest is expected to be low, future price is expected to be high. Traders would like to store more now, and they would like to sell it high price in the future. Thus I am going to long position for wheat.
For corn market, and according to USDA supply and demand report, Corn beginning stocks for 2012/13 are lowered 193 million(3). US Commodities said: “Corn is supported by the lack of farmer selling and the firmer basis levels (4).” Less stock refers to more storage. It is caused by high future price expected. Corn demand would be more bullish. Thus I would long for corn as well.
(1) http://www.agriculture.com/markets/analysis/corn/argentinas-cn-price-attracts-buyers_9-ar26982
(3) http://www.usda.gov/oce/commodity/wasde/latest.pdf
Hi Elly. I’m interested in wheat too and I believe the wheat price will rise too. I’ve read your blog. Well done! Here are some reasons that I think will be useful for you too.
The U.S. wheat supply will dwindle as poultry and livestock producers continue to turn to wheat as an economical feed source. Increased demand for U.S. wheat in the current crop year is expected to more than offset the growing wheat supply. Wheat export, wheat for domestic food use, and wheat used for seed are expected to remain relatively flat from last year, but feed use will soar, according to USDA.
Besides, the US Agriculture Department said weekly export sales of wheat were 410,000 tonnes, topping forecasts for 250,000 to 375,000 tonnes. A week ago, wheat export sales were 279,900 tonnes.
Hi peter. thank you for commentting on my blog!
I think last week, wheat price was decreasingT.T
I also expected demand exceed the supply last week same as you!
but i guess sometimes the market price change more likely wiht technical explanation than literature.
the price was increasing last few weeks, so it was time to decreasing last week although many article talked about less supply coming.
i think we can say we are right halfway. When i checked CME, I found that the price was increasing too^^
Good to see you back blogging. Keep it up!
thank you so much!