Grains To The Moon

Quote from runningman:

Do Farmers spend more on equipment like tractors and combines or on things like seed and fertilizer? Or irrigation equipment? And have the companies that sell these products been aggressive and successful in raising prices?
More...
====================
Rman;
I would not call it a prediction, but Profilogic & Youngtrader could show some light there for sure.

Lived most of my life in farm communities or near them.
1] Local Ford tractor dealer said it was as slow as he ever saw it;
we had a drought here in growing season, hay & grains supply were hit hard here with small rainfall..

2]2006 was a strange year also, rode in Ford'' King ranch pickups-soy-diesel'',exhaust smelled good, like french fries;
both told me they get a good deal @ Farmers co-op, when they buy bulk.

3]John Deere & some fertilizer companies have seen their stock run/trend up like a deer.Tractors can be leased, or hired;most all use fertilizer regular, except for organic gardeners....

4] May not help the price/demand of oil; but the hay farmers were glad to see it;I saw an ad picture of founder of Interactive Brokers on a horse, in December.The punchline play on words ''never settle for an ordinary trading vehicle.''

5]Don't know much about irrigation, most here either pray persistantly for rain & good harvest;
or the drought drives up the price/lowers the supply.

Friend in Texas, of all places had rain/flood which lowered the supply.Not a global warming trend that hurt him-too much rain lowered supply.

:cool:
 
Be careful bear spreading wheat right now (against new crop July). Rumor mill is saying that Dreyfus might load out the wheat that has been sitting in Toledo warehouses for nearly a decade. About 25 million bushels there. Issue the receipts they own against the March futures, in the process capturing the 25 or 30 cents or whatever to push March/May to full carry. We run out of old crop wheat essentially at that point and May/July is free to run to 5 bucks or 8 bucks or any price imaginable. Then all the 08 spreads go to full carry every roll until we run out of wheat again (which I am sure will happen).
 
Mcurto,

"in the process capturing the 25 or 30 cents or whatever to push March/May to full carry."

What would be full carry for Mar/May ?
 
Mcurto,

I think I can answer my own question, thanx to Nazzdack's help on another thread,

# of days = 60 days
LIBOR = 5.00% (Bloomberg)
Futures price = I believe we would use March 08, $979.4/bushel
Cost of Carry per CBOT = $.0015


# days x { (Interest rate/365 x Futures Price) + .0015

Cost of carry bet Mar/May = 8.04 cents

WH8/WK8 trading @ 5 cents even

Even that said, still unclear on the dynamic you just mentioned....could you elaborate again for thread??

Thanks in advance,

J-Law
 
Low-quality grain in the cash market tends to depress the front month contract. Since we're in a raging bull market, the front-month should keep outpacing the deferred months. The premium should expand more because the front month, March, is old-crop while the deferred months are new-crop. Just as in 1973 & 1980, the only "weapon" remaining to halt the market seems to be to declare an export embargo.
 
Quote from nazzdack:

Low-quality grain in the cash market tends to depress the front month contract. Since we're in a raging bull market, the front-month should keep outpacing the deferred months. The premium should expand more because the front month, March, is old-crop while the deferred months are new-crop. Just as in 1973 & 1980, the only "weapon" remaining to halt the market seems to be to declare an export embargo.
More...


Thanks, i was wondering about Mcurtos post-a shitload of decade old grain, is effectively worthless, or could be used in feedlots (or, could it?doubtful) or spread out as fertilizer, but i often question my sanity.

Ok, so what, if anything, would put a damper on the grain insanity?
 
Quote from acronym:

Thanks, i was wondering about Mcurtos post-a shitload of decade old grain, is effectively worthless, or could be used in feedlots (or, could it?doubtful) or spread out as fertilizer, but i often question my sanity.

Ok, so what, if anything, would put a damper on the grain insanity?
More...

some good weather?
 
Good weather doesn't help the grain that was already harvested. But the the good weather we got last week (a nice blanket of snow to put the shoots to bed for the winter) has knocked the stuffing out of the new crop july contract. Heaven help anyone who was playing the seasonal jul/mar spread, though...
 
You must log in or register to reply here.
Back
Top