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| As a speculator, I can not (and would not) speculate on where these prices are headed over the next few days or weeks.
I have been long for a good part of this year, and remain so...AND AM LONG EVERYTHING whether oilseeds, products or grains.
Over the years I have experienced the quick upside head fake rally & the major bull or bear move. Sometimes patience is required and I have a lot of it.
The considerations and risks as I see them:
1) Is the grain trade a flat price short? We are early in the crop year, huge visible surplus, the FSU is the cheapest source in town. Commericals, up to the previous Tuesday's COT report, are not overly long wheat....
2) The FSU-near the end of July..the transport arm...halted a few shipments...then under pressure resumed.....all this while..the politicians have denied major damage...they maintained they still held exportable surpluses....I am here to say..they do not know. They are guessing and hoping...MAYBE THEY ARE RIGHT. Who knows?
3) What I do know, is overnight...there is a sudden embargo. Why? The embargo applies to CONTRACTS ALREADY SIGNED as I read the decree.
4) There are some very big grain players which could be at risk here....were they midnight visitors to the Kremlin?
5) In my experience, a rally of the magnitude we've seen in wheat often leads to some horror story a few days or weeks later.
6) Normally, in this type of price advance, the commericals & professional spreaders would be offsets to this spec buying....the big boys relish this sort of move...tomorrow's CFTC report will tell us some of this info. The speed of this rally implies, to me, the professional selling was a bit light. Why?
7) Everyone has an opinion...at this point the boys who know are on the ground in Russia and the Ukraine & they perhaps do not recognize the potential impact.
8) There was a world surplus of wheat...there was, in the 2005+ period also a potential surplus-- until the short crop in Australia.
9) Producers naturally should take advantage of these prices...incremental sales.
10) Otherwise, as far as I am concerned, in a speculative view, no knows anything, myself included, it is all speculation and I continue to believe the risk remains to the topside....except there will be a lot of ups and downs as we enter and exit USDA report times.
Women & Children in the Basement...seat belts....a few cases of Spam in case am wrong.....a bag of whole wheat flour in case I am right....same old game..different time period--you puts up your money & rolls the dice & watch the players' eyes.
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