Hello from the far away Athens City, Greece.
With my opinion the next 3-6 Months you must watch the Wheat and also some other Factors that play a significant Role in their Price.
A little minutes ago i make a small watch to the Currencies of Russia, Ukraine and Kazakhstan.
This Period lost their Value again in comparison with the USD.
Possibly you will wonder and what care that myself,
that trade or want to trade the Wheat?
Care someone a lot.
That meaning logically that the Value of Wheat must drop.
The recent Years after the collapse of the Communism, the Eastern Countries raise significantly their Production in Wheat.
That caught Markets from the Superior Country that export huge Quantities of this Strategic Good, USA.
Also Russia the recent Period give Money Amounts for to Export Russian Wheat.
So, someone must watch and Countries New Rules too.
But they are not only these.
Someone must watch the Weather in the Crop Areas that exist the Crops of Wheat too.
Weather affect a lot the Crops.
Another Factor that play a Role too, are the Ocean Freight Rates.
Regular, the Global Grain Trade is going via the Seas.
What means that to someone?
Let me give an Example.
Based in the last GMR Plus Report and the last Ocean Freight Rates Report, of the International Grains Council, the FOB Wheat Price of:
US No 2 SRW (ord) (Gulf) is 161 USD FOB per Ton
and for the: Black Sea Milling is 160 USD FOB per Ton.
Now, add that Amount to the Last International Grains Council Ocean Freight Rates Report and you will have in Total Cost:
Total Cost for to buy from the Black Sea Milling Wheat, the:
Spain-Mediterranean is 186 USD
Pakistan is 193 USD
Egypt -Alexandia is 183 USD
Marocco(Casablanca) is 186 USD
Tunisia is 187 USD
Total Cost for to buy from the Gulf, the US No 2 SRW (ord) Wheat, the:
Spain-Mediterranean is 194 USD
Pakistan is 210 USD
Egypt -Alexandia is 204 USD
Marocco(Casablanca) is 199 USD
Tunisia is 202 USD
Meaning,
that the Price of Gulf US No 2 SRW (ord) Wheat,
theoriticaly must drop at least minimum 5%-10%,
(if the Freight Rates remain steady),
for to be more competitive to the Black Sea Milling Wheat in the above destinations.
It is not easy the game to Wheat and also to the Agricultural Goods.
Someone must calculate together many Factors and if suppose that do that,
does not exist a Guarantee that will make a Profit in the Agricultural Futures Markets.
The regular is, to lost huge Amounts of Money.
As last thing i want to write the following that i find in the Book,
Merchants of Grain, The Viking Press, of the Author Dan Morgan.
In the beginning of the Book exist:
It was the Wheat, the Wheat! It was on the move again.
From the farms of Illinois and Iowa, from the ranches of
Kansas and Nebraska, from all the reaches of the Middle
West, the Wheat, like a tidal wave, was rising, rising. Al-
mighty, blood-brother to the earthquake, coeval with the
volcano and the whirlwind, that gigantic world force, that
colossal billow, Nourisher of the Nations, was swelling and
advancing.
-FRANK NORRIS, The Pit
Kind Regards,
George Kanellopoulos.
But like I said in some prior posts some interesting spread ideas look like they might be developing in the next few months with the Wheat.