rounded corner
rounded corner
top border

Wheat Prices Matter


Bookmark and Share

Wheat Prices Matter

CURRENT STATE:

WHEAT:This being the final quarter of the year, Wheat prices are still stuck in neutral. This is not surprising given the latest US Department of Agriculture report which suggested a bearish tone for Wheat going forward. For those of you that follow my column youre the first to know Ive been pointing this idiosyncrasy out for the past two months. The USDA now find a larger than expected spring Wheat crop for next year of which is bearish news for the commoditys price. More importantly, if you recall in my last couple of columns Ive upped my estimated yields for next years crop by a factor of 1.10 i.e. US yields, and thanks USDA for just now confirming my estimates. The US Department of Agriculture should give up on reporting because theyre simply always late to the party. They always arrive when the punch bowl is being taken away.

As for Wheat, I personally, do not see any catalyst that will drive prices from their current short-term mean other than the normal hedge fund activity which could bias the price upwards. Hedge funds have been caught out on the wrong side of this trade for quite some time and they continue to think they have an understanding of how this beautiful commodity is to be traded, but they continue to rack up trading losses. The possibility of a strong Wheat harvest will continue to keep Wheat price subdued.

In short, I still have a buy on Wheat, albeit a weak buy. In any event, even though wheat prices are still in dire straits, Im still long the commodity on a day-to-day basis but watch this space! Farmers, its not too late to lock in a hedging strategy for next years crop, so give me a call. I have a strategy that could benefit you.

MORNING CALL and Recommendation:

We are Long @KW given both Algorithms point to the upside.

POSITION:

Long: @KW (Hard Red Winter Wheat)

Price: 426.25 (8/29/2017) (continuous contract; contract adjusted)

Current Price: 443.5.50 (10/2/2017, 8am CST)

PROFIT/LOSS:

+253.75 (as of January 2nd, 2017; per 1 contract)

FULL DISCLOSURE: Short KW

For farmers/producers looking to put on a hedge please give me a call for a no obligation free quote. Ill be more than willing to visit your farm and explain how a hedge works, obviously at not costs to you. Please visit our website: www.royalhighlandadvisors.comor call me at 920-319-1444. Email: phil@royalhighlandadvisors.com, phil@agriskconsultants.com, phillip.mcknight@bath.eduorphil.mcknight@alumni.ucla.edu.

Important Futures Trading Disclaimer

Trading the financial markets (stocks, futures, forex, options, etc.) can involve risk of loss. You should only consider risk capital when trading the financial markets. Please bear in mind that you as an investor could lose some or all of your investment when trading the financial markets. Please also bear in mind that past results are not necessarily indicative of future results.



Recent articles from this author



About the author


Phil McKnight has a Bachelors Degree in Accounting from the University of Arkansas (Fayetteville), a Masters in Business Administration from Northeastern University, a PostGrad Diploma in Personal Financial Planning from the University of California (Los Angles, UCLA), and a PhD in Finance from the University of Bath (England, UK). Phil graduated with distinction/summa cum laude from UCLA.

Published by Barchart
Home  •  Charts & Quotes  •  Commentary  •  Authors  •  Education  •  Broker Search  •  Trading Tools  •  Help  •  Contact  •  Advertise With Us  •  Commodities
Markets: Currencies  •   Energies  •   Financials  •   Grains  •   Indices  •   Meats  •   Metals  •   Softs

The information contained on InsideFutures.com is believed to be accurate but is not guaranteed. Market data is furnished on an exchange delayed basis by Barchart.com. Data transmission or omissions shall not be made the basis for any claim, demand or cause for action. No information on the site, nor any opinion expressed, constitutes a solicitation of the purchase or sale of any futures or options contracts. InsideFutures.com is not a broker, nor does it have an affiliation with any broker.


Copyright ©2005-2018 InsideFutures.com, a Barchart.com product. All rights reserved.

About Us  •   Sitemap  •   Terms of Use  •   Privacy Policy