Hello Again.
Before, say anything,
i want to ask you to forgive me,
if exist any confuse to you from my Data that put here.
Indeed this Topic create it for to cover a little, i guess,
the importancy of Wheat Spreads,
especially between the 3 Major U.S.A Exchanges,
a) Chicago Board of Trade ( CBOT ),
b) Kansas City Board of Trade ( KCBT ),
c) Minneapolis Grain Exchange ( MGEX ).
Wheat Spreads alone is a very big Issue.
So, based and in your Words,
i have find something after a tremendous long time of personal troubles,
that makes me to be away from the Grains Markets.
So, here is something,
that published it in the Inside Agriculture Report of 7th December 2012, of Thomson Reuters.
Here it is:
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COLUMN-Minneapolis-Kansas wheat spread primed for a move
By Gavin Maguire
Minneapolis wheat may be about to awaken from its recent slumber and rebuild a premium over Kansas City wheat
as buyers begin to opt for higher-protein grade wheat over lesser grade options and Kansas City wheat
starts to lose some of its luster heading into the winter dormancy period.
The Minneapolis-Kansas City spread recently narrowed to historic lows as K.C. wheat rode higher
on concerns over dry field conditions across the central Plains.
But with those drought fears now already baked in,
traders are starting to turn focus toward the likelihood of spring wheat having to wage
an acreage battle against corn and other crops in 2013 or risk production losses next year,
which should allow for Minneapolis wheat to outperform Kansas wheat over the near to medium term.
KANSAS LOSING STEAM
Kansas wheat has enjoyed a strong price-run since early summer,
when concerns over growing conditions in regions such as the Black Sea and Australia
helped underpin higher-protein winter wheat grades in the United States and elsewhere.
Kansas wheat then gained additional lift this fall,
thanks to the enduring dry conditions throughout the central Plains which forced farmers to plant their crops in bone-dry fields.
Indeed, while Minneapolis wheat prices may have remained at a premium to Kansas City wheat prices throughout 2012,
K.C. wheat has clearly outperformed 'Minnie' wheat for the year as a whole,
and remains more than 20 percent above its value at the start of the year compared to Minneapolis wheat's
roughly 7 percent advance versus its Jan. 1 price.
For a graphic on Kansas and Minneapolis price performance,
click here
http://pdf.reuters.com/pdfnews/pdfn..._87fa7a319ecb4c43911bb461b3bcc03a_PRIMARY.png
For a graphic on Kansas vs Minneapolis wheat spread,
click here
http://pdf.reuters.com/pdfnews/pdfn..._26beed854b28456d98b3cc253d0debe7_PRIMARY.gif
But the fact that Kansas City prices have failed to extend their gains over the past several weeks,
even in the face of deteriorating winter wheat crop ratings,
clearly suggests this market has run out of bullish momentum
and is potentially at risk of losing ground over the coming weeks,
as the winter wheat crop enters dormancy,
now that the U.S. Department of Agriculture has stopped monitoring crop progress until the new year.
http://pdf.reuters.com/pdfnews/pdfn..._5fbb95b00e2d4d3386e80446dd82688c_PRIMARY.png
LARGE SPECULATORS TO TRIM KANSAS EXPOSURE
In addition to facing a lack of fresh buying interest,
Kansas City wheat is also at risk of encountering increased sell-side interest should large speculators
follow their traditional trading patterns and trim net exposure to the market over the opening months of 2013,
when the crop will emerge from dormancy and round out its growth stage.
At the same time,
speculative traders tend to maintain or increase their exposure to the Minneapolis wheat market
over the first few months of the year to coincide with the U.S. spring acreage tussle that sees several key crops vie for planted area.
Given the prevailing low levels of corn inventories following this year's poor growing season,
corn looks especially likely to gain acreage in 2013 and could trigger an acreage battle among soybeans, spring wheat and other crops.
For Seasonal graphic on large speculator net positions in Kansas
and Minneapolis wheat, click here
http://pdf.reuters.com/pdfnews/pdfn..._882a232662fd400db62ca35a57e2748c_PRIMARY.png
PROTEIN BUYING UNDER WAY
A final factor which looks to be working in favor of Minneapolis gaining ground relative to Kansas wheat
has been the recent upturn in Minneapolis export basis levels and simultaneous softening in Kansas export basis levels.
This trend has only been under way for the past few days,
but it suggests that the recent narrowing in the price spread between the two commodities
has triggered increased interest in protein rich Minneapolis wheat over Kansas City wheat which has lower overall protein content.
For a a graphic on Minneapolis and Kansas City export basis
levels click here
http://pdf.reuters.com/pdfnews/pdfn..._b23b9d172d0f4403bc71923d1302a970_PRIMARY.gif
This divergence in basis trends may not last too long should Minneapolis wheat prices undergo a steep rally relative to Kansas wheat.
But as long as the price differential between the two remains close to its currently narrow levels,
consumers can be expected to opt for the higher-grade Minneapolis supplies over their Kansas-based counterpart.
--Gavin Maguire is a Reuters market analyst. The views expressed are his own--
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Kind Regards,
George Kanellopoulos.
