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Grains & Beans

  #241 (permalink)
 
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 SMCJB 
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Hiraphor View Post
Hahaha was just thinking if it's true I might build a systematic strategy out of it, so probably posting on a public forum isn't a good idea.

That I also agree with!

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  #242 (permalink)
 
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 SMCJB 
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crptowarzone View Post
Interesting thread to talk about beans and grains. Finding a lot of information on the major food grains in major economies.

That @myrrdin guy is a wealth of knowledge in many commodities.

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  #243 (permalink)
 myrrdin 
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SMCJB View Post
That @myrrdin guy is a wealth of knowledge in many commodities.

Thank you !

All of my knowledge is from publicly available literature which is accessible for retail traders. Following this literature over many years - in my case 15 - 20 years - and drawing the right conclusions myself does indeed yield some knowledge. Everybody can achieve this knowledge - but you have to stay with this topic for a long time. By the way, my professional background is mechanical engineering, and I received my PhD in fluid mechanics.

Currently, I do not write a lot about Grains & Beans. The reason is simple: We are in the middle of a weather market. And as an expert in fluid mechanics, I am aware of the difficulty forecasting the weather for a couple of weeks or months.

I like the saying of a large trader - unfortunately I do not remember the name: "It is important to know when to trade and when to go fishing." Well, I do not go fishing, but there are many other commodities that can be traded.

Best regards, Myrrdin

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  #244 (permalink)
 myrrdin 
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myrrdin View Post
It is interesting to note that the WN21-WN22 now trades at -18 c. This suggests that wheat is not considered to be extremely tight in 21/22.

Whereas the WN22-WN23 still trades between 40 and 50 c, suggesting that the trade considers wheat extremely tight in 22/23. But how can anybody know ? The seed will not be in the ground for some more months. And there are no reliable weather reports for this period of time.

I am still convinced that the WN22-WN23 is significantly overpriced. A reason could be the extremely low volume in the WN23. The volume of this contract should rise when the WN21 expires, and the WN22-WN23 becomes the most actual spread.

Best regards, Myrrdin

In recent weeks, the WN22-WN23 was doing what I expected it to do - grinding lower. It should move further into this direction for the next couple of months, assuming that seeding conditions in the Northern Hemisphere are ok.

I am surprised about the volume of the WN23 still being extremely low at 5 - 10 futures per day after the expiry of the WN21. I had expected volume to pick up after the expiry of the WN21 because of spread trading in the WN22-WN23, which now is the first spread of New Crop contracts. Volume of the WN22 is approx. 500 - 600.

Best regards, Myrrdin

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  #245 (permalink)
 myrrdin 
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The spread C-KW followed the seasonal chart very nicely in recent months. The seasonal chart suggests the spread turning upwards for the next couple of months.

There are (understandable) rumors that a lot of wheat will be planted in Kansas this fall. According to a report by the Australian Bureau of Agricultural and Resources Economics and Sciences (ABARES) from early August the Australian wheat crop will be 13 % above the 10 years average. Corn price seems to be well-supported.

It is my assumption that the C-KW spread will turn around to move upwards some time between now and September.

I entered a first position of the July 2022 contracts at the end of last week.

Best regards, Myrrdin

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  #246 (permalink)
 myrrdin 
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myrrdin View Post
The spread C-KW followed the seasonal chart very nicely in recent months. The seasonal chart suggests the spread turning upwards for the next couple of months.

There are (understandable) rumors that a lot of wheat will be planted in Kansas this fall. According to a report by the Australian Bureau of Agricultural and Resources Economics and Sciences (ABARES) from early August the Australian wheat crop will be 13 % above the 10 years average. Corn price seems to be well-supported.

It is my assumption that the C-KW spread will turn around to move upwards some time between now and September.

I entered a first position of the July 2022 contracts at the end of last week.

Best regards, Myrrdin

I liquidated the position at about the entry price before the USDA report this week. In my opinion, there is some downside risk for corn, as weather premium might be taken out of the corn price.

I might enter this trade again later.

Best regards, Myrrdin

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  #247 (permalink)
Hiraphor
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myrrdin View Post
I liquidated the position at about the entry price before the USDA report this week. In my opinion, there is some downside risk for corn, as weather premium might be taken out of the corn price.

I might enter this trade again later.

Best regards, Myrrdin

Agree with this - I didn't comment before because I haven't run purely seasonal models before, but fundamentally wheat looks like it could be in shorter supply than corn to me.

EDIT: perhaps not fundamentally shorter supply in the long term, but in the short term I feel wheat could go against the seasonal trend with the current supply picture.

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  #248 (permalink)
Hiraphor
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bump on grains too! anything new?

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  #249 (permalink)
 myrrdin 
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Hiraphor View Post
bump on grains too! anything new?

The only position I hold in the grains is the WN22-WN23 spread. I still see significant room for an upwards move (Large Australian crop expected, large plantings in the US expected).

Best regards, Myrrdin

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  #250 (permalink)
Hiraphor
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myrrdin View Post
The only position I hold in the grains is the WN22-WN23 spread. I still see significant room for an upwards move (Large Australian crop expected, large plantings in the US expected).

Best regards, Myrrdin

Have a look at ZM December 21 - Jan 22. Seems to be little downside risk on that one in my opinion.

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