Wheat Waits for a Black Sea Breakthrough
The Ag commodity markets have largely tread water this week, with the much-anticipated USDA data dump keeping most participants on the sidelines. Traders made only minor adjustments to positions ahead of the report, waiting for some fresh direction. The August World Agricultural Supply and Demand Estimates (WASDE) report had a little bit in it for […]
Black Sea Escalates, Wheat Looks Away
Some weeks are just meant to humble you. This past week was one of them. The volatility we’ve seen is a timely reminder that markets don’t have to make sense. As the old traders’ saying goes, “The market can remain irrational longer than you can remain solvent.” Some weeks are just meant to humble you. […]
More twists than a game of Snakes and Ladders
What a difference a week can make. Having watched risk premiums build steadily for a couple of weeks, those same premiums were stripped away almost instantly when the negotiators entered the chat room. The escalation in the Black Sea reached a tipping point last week, with the major combatants targeting each other’s port facilities and […]
Conflict escalations driving the market
Wheat markets across the globe exploded back into life this week as two old flash points reignite. Chicago (CBOT) has rallied 31c/bu – or approximately AU$16/t – as the Kerch Strait issue remains unresolved and now the conflict has spread further in the Middle East as the Red Sea is potentially under threat of blockade. […]
Black Sea Risk Rises
To paraphrase the old Footy Show, it’s been a BIG week in grain markets. It all kicked off last Friday with the USDA’s July supply and demand report. Wheat balance sheets were expected to tighten, and the report delivered. US ending stocks came in lower – albeit marginally above trade expectations – while global wheat […]
Weather wobbles
All the major agricultural commodities had their turn in the spotlight this week. Corn and soybeans led the AG complex higher early on, driven by weather concerns, while wheat joined the overnight rally ahead of tonight’s USDA report, which is expected to show another reduction in production. The heat in Europe remains the biggest concern […]
Will Corn be the King maker?
US markets have been tracking along almost blissfully unaware of what has been unfolding across the Atlantic. If anything, US wheat futures have been content to follow global values lower as Northern Hemisphere harvest pressure and sluggish export demand continue to weigh on prices. That changed briefly this week when the USDA released its latest […]
Markets sweat on EU heat
Agricultural markets have been on the wrong end of a sell-off for the past couple of weeks. That slide was halted overnight as the major ag commodities rallied on improving demand signals and the extreme heat currently gripping western Europe. Parts of France and Germany recorded some of their hottest June days on record, while […]
King Corn and the Devilish Details
I expected the wheat market to be a casualty of this week’s announcement that the conflict in Iran is effectively over. While the formal ceasefire signing is scheduled for Switzerland this weekend, many markets were still carrying a residual premium that looked vulnerable to being stripped away. In fairness, agricultural markets had already spent several […]
Try as you might, markets can’t escape politics
It feels like we’ve all endured a fair dose of political fatigue over the past couple of months after significant changes across the national and international stage, so I thought it might be a good time to focus on what’s directly in front of us. As discussed in recent newsletters, the traditional seasonal peak in […]
Power plays
The “Boy Who Cried Wolf” feels like an increasingly apt analogy for both sides of the Iran conflict. This week alone we have heard repeated claims that the conflict is over, the Strait is reopening, diplomacy has prevailed and only minor details remain — only for the opposing side to immediately contradict the narrative. Markets […]
Agatha Christie would be proud
A wheat trader recently said to me, “Good luck trying to trade this market.” To describe conditions as ‘choppy’ would be an understatement of the highest order. Perhaps this is what markets look like now the managed money crowd has largely exited the massive short positions that had previously dampened volatility. Perhaps it’s manipulation. Either […]