Some commodity prices were under pressure Tuesday after a report from the International Monetary Fund revealed it slashed global economic growth for the year from 3.5 percent to 3.3 percent.
Gold for December delivery dropped $10.70 an ounce to settle at $1,765. December silver was down 3.2 cents an ounce to $33.985. January platinum fell $3.50 to settle at $1,695.30 an ounce.
Unsurprisingly, the IMF confirmed the leading economies of the world are at risk of recession, although the reality is we've really never emerged from latest recession, and there has been no recovery.
Those commodities moving up on the day included energy, palladium and wheat. Soybeans fell a penny to $15.50 a bushel. Palladium climbed to $658.20, up $1.25 an ounce.
Concerns over supply because of a slowdown in production in the North Sea and rising tensions in the Middle East were behind the rise in energy prices. Recent fires at a refinery in the U.S and another in Russia has also added price support in some energy segments.
Benchmark crude oil futures climbed $3.06, or 3.4 percent, to settle at $92.39 a barrel in New York. That is the highest level in over a week. Brent crude closed at $114.50, jumping $2.68, or 2.4 percent.
Heating oil increased by 5.89 cents to $3.2032 a gallon, and wholesale gasoline was up 6.56 cents to $2.9587 a gallon. Natural gas was up by 6.4 cents to $3.467 per 1,000 cubic feet.
The Dow Jones Industrial Average plunged 110 points to close at 13,473, a loss of 0.8 percent. The S&P 500 Index dropped to 1,441, losing 14 points or just under 1 percent.
The ICE dollar index climbed to 80.023, up from Monday's 79.595.
Showing posts with label Wheat Prices. Show all posts
Showing posts with label Wheat Prices. Show all posts
Tuesday, October 9, 2012
Thursday, October 14, 2010
Monsanto (NYSE:MON), DuPont (NYSE:DD), Dow (NYSE:DOW) Receive Coverage from Credit Agricole (OTC:CRARY)
The soaring price of major grains corn, soybeans and wheat has a number of agriculturally related stock generating interest, as they soar in price, including firms like Monsanto (NYSE:MON), DuPont (NYSE:DD) and Dow Chemical(NYSE:DOW), which have had coverage initiated on them by Credit Agricole (OTC:CRARY).
Lower estimated crop yields in the sector are the reasons behind the surge in prices.
Monsanto and its nemesis DuPont were both started off with "Outperform," while Dow Chemical received an "Underperform" rating from Credit Agricole.
Dow Chemical closed the trading session on Wednesday at $29.82, rising a penny, or 0.03 percent. Credit Agricole has a price target of $88 on them.
Dupont finished at $46.88, gaining $0.59, or 1.27 percent. A price target of 54 has been placed on the company.
Monsanto performed the best of the three Wednesday, reaching $54.69, a gain of $2.44, or 4.67 percent. They have a price target of $60 a share.
Lower estimated crop yields in the sector are the reasons behind the surge in prices.
Monsanto and its nemesis DuPont were both started off with "Outperform," while Dow Chemical received an "Underperform" rating from Credit Agricole.
Dow Chemical closed the trading session on Wednesday at $29.82, rising a penny, or 0.03 percent. Credit Agricole has a price target of $88 on them.
Dupont finished at $46.88, gaining $0.59, or 1.27 percent. A price target of 54 has been placed on the company.
Monsanto performed the best of the three Wednesday, reaching $54.69, a gain of $2.44, or 4.67 percent. They have a price target of $60 a share.
Wednesday, October 13, 2010
BHP (NYSE:BHP) Saying Goodbye to $130 Potash (NYSE:POT) Bid?
Now that an unexpected factor offers support to Potash Corp. (NYSE:POT), BHP (NYSE:BHP) may have to rethink their bid of $130 a share for the company as rising grain prices have changed the game since that time.
Interesting that the market is now driving the value of Potash and other fertilizer and agricultural companies.
The good news for BHP, if they view it that way, is the added value of Potash, if they are approved for and win the company, is they will inherit a company whose intrinsic value is higher for a reason, and not because Potash executives pointed to a mythical period down the road when it would happen.
Now you've got the debt issue on the plate for BHP as well. But the higher value of Potash should help ease that, even it it's different from the original intent of the company.
Another major change from the higher price of grains is the attitude of Potash shareholders, who seemed poised to accept the deal, but now probably will consider $130 a share far too little.
Of course things change quickly in the volatile agriculture sector as far as prices go. The trend for corn, and by extension, soybeans and wheat, has been going up for months, and the lower corn and soybean yields should support that trend for awhile.
That means if BHP continues to pursue Potash, those prices will remain in place during the time of negotiations and due diligence. It looks like BHP will no longer come close to the $130 price if they want to land Potash.
Interesting that the market is now driving the value of Potash and other fertilizer and agricultural companies.
The good news for BHP, if they view it that way, is the added value of Potash, if they are approved for and win the company, is they will inherit a company whose intrinsic value is higher for a reason, and not because Potash executives pointed to a mythical period down the road when it would happen.
Now you've got the debt issue on the plate for BHP as well. But the higher value of Potash should help ease that, even it it's different from the original intent of the company.
Another major change from the higher price of grains is the attitude of Potash shareholders, who seemed poised to accept the deal, but now probably will consider $130 a share far too little.
Of course things change quickly in the volatile agriculture sector as far as prices go. The trend for corn, and by extension, soybeans and wheat, has been going up for months, and the lower corn and soybean yields should support that trend for awhile.
That means if BHP continues to pursue Potash, those prices will remain in place during the time of negotiations and due diligence. It looks like BHP will no longer come close to the $130 price if they want to land Potash.
Friday, September 3, 2010
Higher Wheat Prices on Russian Ban, Food Riots Commence
Russia surprised the world when it announced it was going to extend the ban on exporting wheat, pushing wheat prices up, and resulting in riots in Mozambique because of higher bread prices.
Wheat won't be exported from Russia until the latter part of 2011, assuming the wheat harvest goes okay.
Wheat futures for December increased to $7.35 a bushel on the Chicago Board of Trade, a gain of 21 cents. In just three days wheat has risen 7 percent. which follows on the footsteps of a 38 percent increase in July and a 3.7 percent increase in August.
This all seems to be driven by emotion, as the actual situation isn't that dire, and there are plentiful wheat supplies around the world.
Even the goofy call by the United Nations' Food and Agriculture Organization to call a meeting over this is ridiculous. There's nothing to be concerned with, other then nations ordering supplies from alternative sources. How hard can that be?
This is more of a manufactured crisis with reporting on only one side of the issue, leaving out the huge supply of wheat there is available around the world.
Few in the industry are offering balance because they like the high prices and profits they're getting.
Wheat won't be exported from Russia until the latter part of 2011, assuming the wheat harvest goes okay.
Wheat futures for December increased to $7.35 a bushel on the Chicago Board of Trade, a gain of 21 cents. In just three days wheat has risen 7 percent. which follows on the footsteps of a 38 percent increase in July and a 3.7 percent increase in August.
This all seems to be driven by emotion, as the actual situation isn't that dire, and there are plentiful wheat supplies around the world.
Even the goofy call by the United Nations' Food and Agriculture Organization to call a meeting over this is ridiculous. There's nothing to be concerned with, other then nations ordering supplies from alternative sources. How hard can that be?
This is more of a manufactured crisis with reporting on only one side of the issue, leaving out the huge supply of wheat there is available around the world.
Few in the industry are offering balance because they like the high prices and profits they're getting.
Tuesday, August 10, 2010
Russia May Resume Wheat Exports in October
Deputy Prime Minister Viktor Zubkov, the top agriculture official in Russia, said Russia could resume exporting wheat in October.
Before a final decision is made, Zubkov said they'll look at the final figures concerning the wheat harvest.
Countries like Israel, Turkey and Egypt are major importers of Russian wheat, and have been in close contact with Zubkov concerning whether they'll be exporting wheat, in order to develop alternative sources if Russia continues the wheat export ban.
Even with ample global wheat supplies, the price of wheat shot up after the Russian announcement they were suspending exports. That is based on emotion rather on the reality there could be a wheat shortage, which there isn't.
Before a final decision is made, Zubkov said they'll look at the final figures concerning the wheat harvest.
Countries like Israel, Turkey and Egypt are major importers of Russian wheat, and have been in close contact with Zubkov concerning whether they'll be exporting wheat, in order to develop alternative sources if Russia continues the wheat export ban.
Even with ample global wheat supplies, the price of wheat shot up after the Russian announcement they were suspending exports. That is based on emotion rather on the reality there could be a wheat shortage, which there isn't.
Friday, August 6, 2010
Wheat Fears Wane as Prices Plunge on Ample Global Supply
Wheat prices have soared recently on the hyped-up drought story in Russia, which while real, when compared with the global wheat market, wasn't as big a story as was led to believe, or as big a risk.
As the media catch up with the reality of the global wheat market, and quit their narrow focus on Russia, the supply of wheat is much stronger than when the price went up to over $13 a bushel in the early part of 2008, which ended with food riots around the world.
That is less likely to happen this time around, as stockpiles today are roughly 50 percent higher than they were during the early 2008 period. They are also approximately 30 percent of the average annual global consumption, offering a wider range of protection than in the past.
Of course these times of fear and emotion-driven data are perfect for those looking to move in and out of the market and make quick and predictable profits.
But I think it's going to settle down now that emotions are settling down and the overall supply picture is being looked at.
Many countries have increased their wheat acreage, not only in response to the 2008 crisis, but before that as well, understanding the potential risks associated with weather and grains.
This doesn't take away from the possibility of food inflation related to the increase in wheat, as it still must pass through system, and those costs will be locked in for the most part, and that will cause prices of bakery goods and cereal to rise at some point.
That isn't to say other events couldn't arise that could cause wheat prices to go up, but as it stands today, global supplies are ample, and we'll see wheat prices continue to fall, unless a different set of factors become part of the equation.
As the media catch up with the reality of the global wheat market, and quit their narrow focus on Russia, the supply of wheat is much stronger than when the price went up to over $13 a bushel in the early part of 2008, which ended with food riots around the world.
That is less likely to happen this time around, as stockpiles today are roughly 50 percent higher than they were during the early 2008 period. They are also approximately 30 percent of the average annual global consumption, offering a wider range of protection than in the past.
Of course these times of fear and emotion-driven data are perfect for those looking to move in and out of the market and make quick and predictable profits.
But I think it's going to settle down now that emotions are settling down and the overall supply picture is being looked at.
Many countries have increased their wheat acreage, not only in response to the 2008 crisis, but before that as well, understanding the potential risks associated with weather and grains.
This doesn't take away from the possibility of food inflation related to the increase in wheat, as it still must pass through system, and those costs will be locked in for the most part, and that will cause prices of bakery goods and cereal to rise at some point.
That isn't to say other events couldn't arise that could cause wheat prices to go up, but as it stands today, global supplies are ample, and we'll see wheat prices continue to fall, unless a different set of factors become part of the equation.
Wednesday, August 4, 2010
What Deflation? Wheat Leading Food Inflation
It's strange to hear the deflation advocates continue their mantra of lower prices while food prices have hit their highest levels in the United States in 26 years in March, and wheat continues to soar in price.
September futures for wheat hit $7.11 on Wednesday, a huge jump of 58 percent from June.
For now wheat is a problem, but it's doubtful that will continue, as countries around the world have increased wheat plantings for several years, and it's more the drought news coverage of Russia and Eastern Europe which is driving wheat prices, more than the actual supply available.
Even so, food inflation is a major threat, and that, probably more than any other element, can lead to social unrest and riots.
Businesses have said the rising inputs associated with their products will be passed on to consumers. And if foolish governments attempt the price control thing, it'll get worse, as enormous shortages will occur, making it even more volatile.
Major foods like meat, dairy and grain is expected to rise higher in price over the next decade, according to the Organization for Economic Cooperation and Development.
Another unknown is how the supply and demand factor will change as consumers in emerging markets increase their meat consumption, which increases demand not only for meat products, but grains used to feed the livestock.
Of larger emerging market countries, India is facing some of the larger inflation problems, with an annualized rate of 10.55 percent as of June.
People can play all the games with numbers they want, and change the definition or parameters of deflation, but inflation will be the problem going forward, and people need to make decisions based on that.
September futures for wheat hit $7.11 on Wednesday, a huge jump of 58 percent from June.
For now wheat is a problem, but it's doubtful that will continue, as countries around the world have increased wheat plantings for several years, and it's more the drought news coverage of Russia and Eastern Europe which is driving wheat prices, more than the actual supply available.
Even so, food inflation is a major threat, and that, probably more than any other element, can lead to social unrest and riots.
Businesses have said the rising inputs associated with their products will be passed on to consumers. And if foolish governments attempt the price control thing, it'll get worse, as enormous shortages will occur, making it even more volatile.
Major foods like meat, dairy and grain is expected to rise higher in price over the next decade, according to the Organization for Economic Cooperation and Development.
Another unknown is how the supply and demand factor will change as consumers in emerging markets increase their meat consumption, which increases demand not only for meat products, but grains used to feed the livestock.
Of larger emerging market countries, India is facing some of the larger inflation problems, with an annualized rate of 10.55 percent as of June.
People can play all the games with numbers they want, and change the definition or parameters of deflation, but inflation will be the problem going forward, and people need to make decisions based on that.
Friday, July 23, 2010
Wheat Futures Gains About to End?
While the financial press continues report on the continuing weather challenges concerning wheat in major producers like Russia and Canada, the question must be asked as to how long that will be able to offer support to wheat futures, which have finished their fourth straight week in gains.
Damage in Russia is real, and Canada to a lesser extent as well, but that has to be taken in light of the global wheat planting and harvest, and like in past years, it has been enormous, and that hasn't changed in any way in 2010.
Over the next several weeks, a growing number of analysts and traders are expecting wheat to fall in price, to as low as $5 a bushel by the middle of next month, and possibly more.
Weather-related damages happen every year, and every year reports give a boost to prices temporarily, until the market catches on that there is plenty of wheat available in other regions to make up for it.
For example, this year there is a bumper crop in the United States, and that will contribute a lot to the price of wheat in the near future.
Many other smaller countries have also started to increase wheat acreage over the last several years, and that has played a big part in imports and exports around the globe, and will continue to going forward.
Bottom line is, it won't matter what happens in Russia and Canada, as there will be plenty of wheat for the world to consume, and after this brief period of higher wheat prices, we'll see them start to go down ahead in the near future.
Damage in Russia is real, and Canada to a lesser extent as well, but that has to be taken in light of the global wheat planting and harvest, and like in past years, it has been enormous, and that hasn't changed in any way in 2010.
Over the next several weeks, a growing number of analysts and traders are expecting wheat to fall in price, to as low as $5 a bushel by the middle of next month, and possibly more.
Weather-related damages happen every year, and every year reports give a boost to prices temporarily, until the market catches on that there is plenty of wheat available in other regions to make up for it.
For example, this year there is a bumper crop in the United States, and that will contribute a lot to the price of wheat in the near future.
Many other smaller countries have also started to increase wheat acreage over the last several years, and that has played a big part in imports and exports around the globe, and will continue to going forward.
Bottom line is, it won't matter what happens in Russia and Canada, as there will be plenty of wheat for the world to consume, and after this brief period of higher wheat prices, we'll see them start to go down ahead in the near future.
Wednesday, July 21, 2010
Wheat Futures Up on Supply Uncertainty
The recent up and down movement of grains continues, and that includes wheat futures, which were back up again today on concerns over whether wheat inventories will be able to meet demand.
Dry weather in the European Union, Russia and Kazakhstan has generated the most concern, although Russia sold Egypt wheat recently, causing some to think the U.S. isn't pricing wheat correctly, and is attempting to charge too much, even with the bad weather conditions.
Countering some of this is the good weather in the Midwest of the United States, which has become cooler and wetter, increasing the odds of a much better crop than if dry, hot conditions had continued.
All of this is speculation, and even if things are as bad as they are being passed off as, a growing number of countries have increased wheat production over the last several years, and it remains to be seen if there really is a supply problem, or the industry is creating that narrative in order to jack up prices.
After three straight days of falling prices, wheat rebounded to $5.8825 a bushel on the Chicago Board of Trade, gaining 11.25 cents, or 1.9 percent.
Wheat futures for September delivery on the Kansas City Board of Trade increased 12 cents to $6.015 a bushel, or 2 percent.
Dry weather in the European Union, Russia and Kazakhstan has generated the most concern, although Russia sold Egypt wheat recently, causing some to think the U.S. isn't pricing wheat correctly, and is attempting to charge too much, even with the bad weather conditions.
Countering some of this is the good weather in the Midwest of the United States, which has become cooler and wetter, increasing the odds of a much better crop than if dry, hot conditions had continued.
All of this is speculation, and even if things are as bad as they are being passed off as, a growing number of countries have increased wheat production over the last several years, and it remains to be seen if there really is a supply problem, or the industry is creating that narrative in order to jack up prices.
After three straight days of falling prices, wheat rebounded to $5.8825 a bushel on the Chicago Board of Trade, gaining 11.25 cents, or 1.9 percent.
Wheat futures for September delivery on the Kansas City Board of Trade increased 12 cents to $6.015 a bushel, or 2 percent.
Tuesday, July 20, 2010
Wheat Falls Again on Egypts' Russian Deal
Wheat prices fell for the third straight trading day, as Egypt decided to go with Russia to buy their latest wheat. Egypt acquires the most wheat in the world.
In the latest deal Egypt bought 120,000 metric tons from Russian, This surprised some because of news of the ongoing drought in Russia, which many thought would force Russia to cut back on exports to be sure their own people had enough.
Some analysts believe US wheat isn't priced accurately, and it shouldn't have been assumed that because of news of the drought, Russia would be storing their wheat and not engaging the market.
Another factor in wheat prices falling is the realization it won't be needed to feed livestock in the US because of a potential shortfall in the corn harvest, which conditions have changed because of good weather providing lower temperatures and rain to corn fields in the Midwest.
At 10:00 AM EDT, wheat futures for September delivery dropped 8 cents, to $5.7425 a bushel, or 1.4 percent.
Wheat generates $10.6 billion in the U.S., which is the world's largest exporter.
In the latest deal Egypt bought 120,000 metric tons from Russian, This surprised some because of news of the ongoing drought in Russia, which many thought would force Russia to cut back on exports to be sure their own people had enough.
Some analysts believe US wheat isn't priced accurately, and it shouldn't have been assumed that because of news of the drought, Russia would be storing their wheat and not engaging the market.
Another factor in wheat prices falling is the realization it won't be needed to feed livestock in the US because of a potential shortfall in the corn harvest, which conditions have changed because of good weather providing lower temperatures and rain to corn fields in the Midwest.
At 10:00 AM EDT, wheat futures for September delivery dropped 8 cents, to $5.7425 a bushel, or 1.4 percent.
Wheat generates $10.6 billion in the U.S., which is the world's largest exporter.
Monday, July 19, 2010
Soybeans Follow Other Grains Down on Improved Weather
There was no doubt corn, wheat and soybeans were going to plunge if wetter and cooler weather was going to arrive in time, and now that it has, the major agricultural products plunged in price today, with soybeans right behind corn in how deeply they dropped.
Of the major three, wheat future dropped the least, as other factors outside the United States, like the Russian drought, continues to play a role there.
Soybean futures for November delivery had a decline of 13 cent to $9.72 a bushel, or a 1.3 percent drop.
Corn for December delivery dropped 3.3 percent, or 13.25 cents, to settle at $3.94 a bushel.
Of the major three, wheat future dropped the least, as other factors outside the United States, like the Russian drought, continues to play a role there.
Soybean futures for November delivery had a decline of 13 cent to $9.72 a bushel, or a 1.3 percent drop.
Corn for December delivery dropped 3.3 percent, or 13.25 cents, to settle at $3.94 a bushel.
Wheat Prices Drop as Corn Streak Ends
After concerns over the corn harvest in the Midwest was alleviated with a positive weather forecast of wetter and cooler, corn prices plunged, and wheat prices followed them down, although at a modest level.
Concerns over the drought in Russia have brought support to wheat prices, along with other weather concerns around the globe.
But as in other recent years, so many countries have started growing wheat successfully, that the supply has outstripped demand, keeping prices under pressure for years.
Now the idea that wheat may have to replace corn in animal feed will probably be laid aside, putting more downward pressure on the price of the grain.
Wheat for September delivery dropped 5 cents to finish at $5.8225 a bushel.
Concerns over the drought in Russia have brought support to wheat prices, along with other weather concerns around the globe.
But as in other recent years, so many countries have started growing wheat successfully, that the supply has outstripped demand, keeping prices under pressure for years.
Now the idea that wheat may have to replace corn in animal feed will probably be laid aside, putting more downward pressure on the price of the grain.
Wheat for September delivery dropped 5 cents to finish at $5.8225 a bushel.
Wednesday, March 3, 2010
Commodities Rise on Weaker Dollar
Commodity Prices Rise as Dollar Drops
A number of commodity sector rose as the U.S. dollar weakened against major currencies.
Enjoying the increase were energy, metals and grains, with major crops like corn, soybeans and wheat increasing; something the grain market has been looking and hoping for for awhile.
Also rising in response to the collapsing dollar were gold, silver and copper, while on the energy side price also rose, even though they would normally have fallen on the news oil and gasoline pireced remained higher than expected for the previous week.
Oil gained $1.19 to finish the session at $80.87 on the New York Mercantile Exchange.
Commodity Prices Rise as Dollar Drops
A number of commodity sector rose as the U.S. dollar weakened against major currencies.
Enjoying the increase were energy, metals and grains, with major crops like corn, soybeans and wheat increasing; something the grain market has been looking and hoping for for awhile.
Also rising in response to the collapsing dollar were gold, silver and copper, while on the energy side price also rose, even though they would normally have fallen on the news oil and gasoline pireced remained higher than expected for the previous week.
Oil gained $1.19 to finish the session at $80.87 on the New York Mercantile Exchange.
Commodity Prices Rise as Dollar Drops
Tuesday, March 2, 2010
Corn Futures Down on Dollar, Inventory
Corn Futures, Dollar, Corn Inventory
Corn futures dropped again as the stronger U.S. dollar made investments and exports unattractive, and the significant global corn inventory has left no base to work from.
As with wheat, as mentioned in my last post, when the prices of grains surged in 2008, farmers seeded huge amounts of wheat, corn, soybeans and rice, which all but assured there would be downward pressure on grain prices in the years ahead.
I'm not sure why the farmers continue to do this, or if they're being told wrongly, but farmers need to understand that if they put huge seedings of crops in the year after a big price increase, they can be sure huge numbers of farmers around the world will do the same.
While there is always the possibility of weather having a devastating impact on some crops, as last year showed, there was so much grain on the market that even when their were droughts or other weather problems, there was so much available it didn't have much of an impact.
With corn this is the story, and will continue to be a bearish story until some farmers drop planting it based on past performance.
Eventually there will be major demand around the world for food, but we are far from that with grains at this time, even though analysts and wealthy investors like Jim Rogers tout food and agriculture in general as a great future investment.
It will be all of that, but when farmers plant far more than global demand warrants, we're always going see downward pressure on corn futures and other grains until it corrects itself.
Corn Futures, Dollar, Corn Inventory
Corn futures dropped again as the stronger U.S. dollar made investments and exports unattractive, and the significant global corn inventory has left no base to work from.
As with wheat, as mentioned in my last post, when the prices of grains surged in 2008, farmers seeded huge amounts of wheat, corn, soybeans and rice, which all but assured there would be downward pressure on grain prices in the years ahead.
I'm not sure why the farmers continue to do this, or if they're being told wrongly, but farmers need to understand that if they put huge seedings of crops in the year after a big price increase, they can be sure huge numbers of farmers around the world will do the same.
While there is always the possibility of weather having a devastating impact on some crops, as last year showed, there was so much grain on the market that even when their were droughts or other weather problems, there was so much available it didn't have much of an impact.
With corn this is the story, and will continue to be a bearish story until some farmers drop planting it based on past performance.
Eventually there will be major demand around the world for food, but we are far from that with grains at this time, even though analysts and wealthy investors like Jim Rogers tout food and agriculture in general as a great future investment.
It will be all of that, but when farmers plant far more than global demand warrants, we're always going see downward pressure on corn futures and other grains until it corrects itself.
Corn Futures, Dollar, Corn Inventory
Wheat Futures Prices Fall
Wheat Futures and Wheat Inventories
I've been watching this story unfold for the last couple of years, and it's no surprise that so many wheat farmers have plunged into planting more wheat acreage after the great prices in 2008.
The problem is it was those who had wheat in the fields that year which prospered, not the followers you predictably followed up with large plantings which were assuredly going to drive wheat prices down; and they have.
Again wheat prices fell, as the U.S. dollar increased in value, making export demands fall in the U.S.
The drop of 14.75 cents a bushel to $5.045 on the Chicago Board of Trade was the worst since February 3, and there's really nothing in the fundamentals which will change this for wheat or wheat farmers; or wheat investors for that matter, as couple that with strong wheat inventories around the world and there's little out there that could change this situation.
Farmers need to grow something else if they want to generate profits, not follow the herd the year after great prices were attained.
Wheat Futures and Wheat Inventories
I've been watching this story unfold for the last couple of years, and it's no surprise that so many wheat farmers have plunged into planting more wheat acreage after the great prices in 2008.
The problem is it was those who had wheat in the fields that year which prospered, not the followers you predictably followed up with large plantings which were assuredly going to drive wheat prices down; and they have.
Again wheat prices fell, as the U.S. dollar increased in value, making export demands fall in the U.S.
The drop of 14.75 cents a bushel to $5.045 on the Chicago Board of Trade was the worst since February 3, and there's really nothing in the fundamentals which will change this for wheat or wheat farmers; or wheat investors for that matter, as couple that with strong wheat inventories around the world and there's little out there that could change this situation.
Farmers need to grow something else if they want to generate profits, not follow the herd the year after great prices were attained.
Wheat Futures and Wheat Inventories
Friday, February 26, 2010
Commodities Rise on Falling Dollar
Commodity Prices Rising
The falling dollar gave commodities a boost today, as many raw materials rose as a result of the dollar-denominated factor.
Gold, silver, copper, platinum and palladium all enjoyed price increases with little resistance in a relatively light day of trading.
Another commodity sector rising was energy, where oil, natural gas and gasoline all spiked.
Also joining the other commodity sectors in rising in price were the grains, where corn, soybeans and wheat all moved upwards.
What this shows me is how important the U.S. dollar is to the inflationary pressure we continue to face. While that's nothing new, it does show how just a little weakness in the dollar can drive commodity prices upwards.
It also shows me how vulnerable we are to inflation, and how quickly things can change in relationship to that.
Commodity Prices Rising
Financial Advisor
The falling dollar gave commodities a boost today, as many raw materials rose as a result of the dollar-denominated factor.
Gold, silver, copper, platinum and palladium all enjoyed price increases with little resistance in a relatively light day of trading.
Another commodity sector rising was energy, where oil, natural gas and gasoline all spiked.
Also joining the other commodity sectors in rising in price were the grains, where corn, soybeans and wheat all moved upwards.
What this shows me is how important the U.S. dollar is to the inflationary pressure we continue to face. While that's nothing new, it does show how just a little weakness in the dollar can drive commodity prices upwards.
It also shows me how vulnerable we are to inflation, and how quickly things can change in relationship to that.
Commodity Prices Rising
Financial Advisor
Monday, February 8, 2010
Grain Prices Rise on Short Covering
Grain Prices Going Up
With the crop report about to come out, grain prices rallied some as investors raced to cover their positions in case something unexpectedly changes which would tear into their short positions.
Wheat, corn and soybeans were all up as the shorts were covered, as the crop report from the Department of Agriculture is due.
With grain prices having downward pressure for a month on large inventories, they are due for an upward move, and grain traders want to protect themselves from that.
The concern is if for some reason the supply of grain has declined in any way; an unlikely scenario, but you never know in the markets.
If nothing has happened to change the grain levels, we should see a lot of short positions entered into again.
Wheat for March delivery rose 10.75 cents, a 2.3 percent gain, to settle at $4.84 a bushel. Soybeans increased 16 cents to $9.295 a bushel, and corn increased 4.5 cents to $3.56 a bushel.
Grain Prices Going Up
With the crop report about to come out, grain prices rallied some as investors raced to cover their positions in case something unexpectedly changes which would tear into their short positions.
Wheat, corn and soybeans were all up as the shorts were covered, as the crop report from the Department of Agriculture is due.
With grain prices having downward pressure for a month on large inventories, they are due for an upward move, and grain traders want to protect themselves from that.
The concern is if for some reason the supply of grain has declined in any way; an unlikely scenario, but you never know in the markets.
If nothing has happened to change the grain levels, we should see a lot of short positions entered into again.
Wheat for March delivery rose 10.75 cents, a 2.3 percent gain, to settle at $4.84 a bushel. Soybeans increased 16 cents to $9.295 a bushel, and corn increased 4.5 cents to $3.56 a bushel.
Grain Prices Going Up
Tuesday, February 2, 2010
Soybeans Lowest in Four Months
Soybean futures prices
U.S. soybean futures plunged to their lowest close in almost four months, as the huge South American soybean harvest will increase supply in the midst of weak soybean demand. Secondary reasons for the drop in price was some profit taking on the part of agricultural investors.
March soybeans closed down 4-1/4 cents at $9.09-3/4 a bushel, making it the lowest CBOT close since early October.
In January, soybean futures also took a hammering, dropping by 12 percent for the month.
While corn and wheat were up slightly for the day, it's highly unlikely that is anything but an anomaly, as large harvests guarantee prices will be pressured down for some time to come.
Understanding the potential for food shortages has had many countries around the world increasing their soybean, wheat and corn production, creating grain gluts around the world, although China's desire and willingness to build up food reserves they can't solely provide has had a small effect on having a little support under the sector.
Other than that, things will be tough for soybeans and other grains for some time.
Soybean futures prices
U.S. soybean futures plunged to their lowest close in almost four months, as the huge South American soybean harvest will increase supply in the midst of weak soybean demand. Secondary reasons for the drop in price was some profit taking on the part of agricultural investors.
March soybeans closed down 4-1/4 cents at $9.09-3/4 a bushel, making it the lowest CBOT close since early October.
In January, soybean futures also took a hammering, dropping by 12 percent for the month.
While corn and wheat were up slightly for the day, it's highly unlikely that is anything but an anomaly, as large harvests guarantee prices will be pressured down for some time to come.
Understanding the potential for food shortages has had many countries around the world increasing their soybean, wheat and corn production, creating grain gluts around the world, although China's desire and willingness to build up food reserves they can't solely provide has had a small effect on having a little support under the sector.
Other than that, things will be tough for soybeans and other grains for some time.
Soybean futures prices
Monday, February 1, 2010
Will Agricultural Commodity Prices Rise?
Agricultural Commodity Supply and Demand
It seems on every turn the idea of agricultural commodity prices rising are an illusion rather than a reality, as recent data from the United States Department of Agriculture (USDA) confirms crop production was close to record levels, as supply continues to outstrip demand in the short term.
Even so, agriculture should be a great investment over the long haul, as there is no more land being made and the population of the world continues to grow. There is no way this can be stopped from eventually driving up agricultural prices, as they've been some of the worst performing sectors of all over the last 30 years or so.
There is no doubt grains are beaten down and out of favor, and that represents a buying opportunity.
Once supply and demand sorts itself out, we should see the beginning of a long-term bull market in agriculture, with little to hold it back.
It may take a little longer because of the tightness of the global economy and the near-record crop results this year. But we can be sure it will kick in sometime soon, and when that happens, those that have positioned themselves accordingly will make a fortune through their investments in agriculture.
Agricultural Commodity Supply and Demand
It seems on every turn the idea of agricultural commodity prices rising are an illusion rather than a reality, as recent data from the United States Department of Agriculture (USDA) confirms crop production was close to record levels, as supply continues to outstrip demand in the short term.
Even so, agriculture should be a great investment over the long haul, as there is no more land being made and the population of the world continues to grow. There is no way this can be stopped from eventually driving up agricultural prices, as they've been some of the worst performing sectors of all over the last 30 years or so.
There is no doubt grains are beaten down and out of favor, and that represents a buying opportunity.
Once supply and demand sorts itself out, we should see the beginning of a long-term bull market in agriculture, with little to hold it back.
It may take a little longer because of the tightness of the global economy and the near-record crop results this year. But we can be sure it will kick in sometime soon, and when that happens, those that have positioned themselves accordingly will make a fortune through their investments in agriculture.
Agricultural Commodity Supply and Demand
Friday, January 22, 2010
Marc Faber Likes Wheat
Agriculture Commodity Wheat is Cheap Now
Among agricultural commodities, Marc Faber favors wheat because of the fact it's “very, very cheap."
Talking of the best way to invest in wheat at this time, Faber said it's not through wheat ETFs, as the rollover costs connected to them makes the extremely expensive.
Rather, Faber advises potash companies or companies owning large amounts of farm land are better places to look. In some parts of the world think in terms of the word "plantations," which essentially are the same as farms, although they may operate differently.
The point is to have your money in companies with large land holdings that can be planted with wheat.
Agriculture Commodity Wheat is Cheap Now
Among agricultural commodities, Marc Faber favors wheat because of the fact it's “very, very cheap."
Talking of the best way to invest in wheat at this time, Faber said it's not through wheat ETFs, as the rollover costs connected to them makes the extremely expensive.
Rather, Faber advises potash companies or companies owning large amounts of farm land are better places to look. In some parts of the world think in terms of the word "plantations," which essentially are the same as farms, although they may operate differently.
The point is to have your money in companies with large land holdings that can be planted with wheat.
Agriculture Commodity Wheat is Cheap Now
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