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Wheat Planting Estimates Increased


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Wheat Planting Estimates Increased

CURRENT STATE:

WHEAT:According to a recent report by the International Grain Council (does anyone really read this stuff, other than myself), they trimmed their estimates for the world Wheat area for all of 2018. Even more interesting was the fact they offered very little evidence to support their supposition. Nevertheless, let me set the record straight with regard to Wheat and next years harvest. My estimated yields for next years harvest have increased by a factor of 1.10 domestically and I fully standby that projection. Worldwide I expect Wheat acreage to be up. My planting estimates were revised upward as a result of my channel checks. Further supporting my hypothesis is the most recent US Department of Agricultures WASDE supply and demand crop report which also painted a very negative picture. Simply put, Wheat prices will continue to be restrained by the enormous oversupply brought about by years of over producing, my aforementioned bearish forecasts will only make matters worse. In my view the only catalyst that can tighten supplies would be to plant less and my channel checks suggest farmers are doing just the opposite. My 2018 Wheat price estimate has been lowered to the 360 level.

In any event, I have a sell on Wheat, albeit a weak sell. 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 Short @KW given both Algorithms point to the upside.

POSITION:

Short: @KW (Hard Red Winter Wheat)

Price: 434.25 (10/19/2017) (continuous contract; contract adjusted)

Current Price: 425.25 (10/30/2017, 9am CST)

PROFIT/LOSS:

+252.25 (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.

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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.

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