Not much bullish follow through on the grains after the report yesterday. Pretty quiet ag markets right now.
Ag trade ideas
- Thread starter TraDaToR
- Start date
SocGen puts 'buy' rating on corn, wheat - citing La Nina threat
Societe Generale slapped a buy rating on new crop corn and wheat futures, citing the increased likelihood of La Nina year in 2016.
The La Nina effects is bought about by a cyclical cooling of the Pacific, and frequently follows on the heels of El Nino, when Pacific temperatures are above normal.
"La Nina's impact on commodity markets is generally more defined and focused than the impact of El Nino," said Societe Generale.
Drier weather
Taking into account the currenct El Nino effect, Societe Generale pinned the likelihood of a La Nina event over the next 12 months at 89%.
http://www.agrimoney.com/news/socge...corn-wheat---citing-la-nina-threat--9180.html
Societe Generale slapped a buy rating on new crop corn and wheat futures, citing the increased likelihood of La Nina year in 2016.
The La Nina effects is bought about by a cyclical cooling of the Pacific, and frequently follows on the heels of El Nino, when Pacific temperatures are above normal.
"La Nina's impact on commodity markets is generally more defined and focused than the impact of El Nino," said Societe Generale.
Drier weather
Taking into account the currenct El Nino effect, Societe Generale pinned the likelihood of a La Nina event over the next 12 months at 89%.
http://www.agrimoney.com/news/socge...corn-wheat---citing-la-nina-threat--9180.html
I studied some stuff on El Nino and a strong El Nino is almost always followed by La Nina so I trust the 89%.
However, when I studied the correlation between El Nino/La Nina and yields I can tell you its pretty damn low. I dont know if you can have impact above 0.2 t/ha..
Natural yield randomness is much higher than El Nino/La Nina.
Scratch/small loss @ 0.36.. Nasty spike.
I would like to understand why storable softs can be in strong backwardation on high stocks ?!
Why cash traders are not selling their stuffs and buying it back on longer expiries ?!
That's an interesting question. I am not an expert but I think that sugar is not as storable as for example coffee beans or corn bushels. Perhaps cash traders are just a part of OI and specs are influential too. Perhaps the "weak hands" driving the pressure are the commercial users that need the stuff now no matter what.
Think that's a good short. Wheat is still weakest in the grains complex. Any thoughts on KW-W spread here, looking for spread to go pos again....KW lost a lot of acreage in the report
I like this spread but I already got burned twice
I like this spread but I already got burned twice
March could be poised for a move up if it breaks out of the tight consolidation, me thinks.
US winter wheat sowings, change on year and (on market forecast)
Hard red: 26.5m acres, -2.5m acres, (-2.3m acres)
Soft red: 6.72m acres, -370,000 acres, (-420,000 acres)
White: 3.43m acres, +34,000 acres, (+64,000 acres)
All wheat: 36.609m acres, -2.85m acres, (-2.71m acres)
Data for sowings for 2016 harvest.Sources: USDA, Reuters