Serving Waitsburg, Dayton and the Touchet Valley
Serving Waitsburg, Dayton and the Touchet Valley
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I t has been a long, hot summer. The wheat markets, led by the corn and soybean markets, have reached extremes not seen since 2008. The world markets are anxious and wary, sitting uncomfort- ably on the bench in a bad neighborhood waiting for the Euro- zone economic bus. Every story about United States corn and soybeans or Russian wheat crop disasters in the mainstream news serves to prevent wheat market participants from assessing price reality in the wheat supply and demand balance point. U.S. spring wheat is 67 percent in the bin for this...
The wheat market, hostage this summer to drought in the corn belt, has returned to trading day-to-day on current events such as export sales (or lack thereof). Chicago wheat prices have declined as much as 90 cents per bushel in the few sessions since Aug. 10, but Tuesday's Egyptian purchase of 120,000 tonnes of wheat was from Russia and the Ukraine, only three days after a previous large Russian wheat sale to Egypt. Clearly U.S. wheat offers were too high. Apparently the earlier talk of Russian export restrictions was premature, even though...
I rresistible force meets immovable object - the old football cliché may be applied to the cur- rent wheat market; high emotion and heavy money on the move are making sparks and noise, but theses forces of buying and selling are, for the moment, balanced. For the last week, the price of wheat has been vibrating between $9.15 and $8.60. Granted, it has been a large vibe, with a 55-cent range from high to low, fully explored almost every day. But it is becoming better defined as the days pass. What this allows, for the chart traders among us,...
The wheat market continues its wild ride, with the price of a Chicago wheat bushel declining 95 cents from its high at $9.47 in two trading sessions July 23 and 24, followed by 66 cents up and 29 cents down into Tuesday morning (and more volatility ahead). The heat and drought in the Midwestern U.S. has reduced the corn crop by something like one-third. The weather has moderated a bit, but the decline in crop condi- tion ratings continues. Corn and soybeans in the Western and northern corn belt (Minnesota, North Dakota) have escaped the...
Editor's Note: Gary Hofer regularly writes a column titled Crops for the Times. For our Harvest Edition, we asked him to write about what it was like working harvest when he was a young boy. Enjoy his play-by- play recap. WAITSBURG -- In 1959 and 1960 it took a big crew and many machines to harvest a large crop. Our crew then manned three to five combines and five to six wheat trucks, plus a fuel truck, trap wagon, various pickup trucks and a tractor with pull-chains to rescue combines or trucks that got stuck. Today, with one big combine, a...
There is no sign from the wheat market that the great price rally of summer 2012 is complete -- no chart "sell-me" formation, no measureable change in the weather pattern that has sizzled up the wheat price in Chicago $3 per bushel to $8.95 in 20 trading sessions, and few traders with the gusto to actually sell into the path of such a "Northbound Express" freight train. So what accounts for the growing contrarian emo- tion, the drive to anticipate a selling point and capture the high? We know that prices cannot go up forever. We know that the...
The drought and crop losses occurring in the Midwestern United States have reached the mainstream headlines. There are feature stories running in national publications and on prime-time television with photos of devastated corn crops in Il- linois and Indiana. The dry heat of the last few weeks has cut potential corn pro- duction by at least a third overall, but radically more in some states. As a result of this harsh weather pattern, prices for all grains have risen. Corn is up $2.12 per bushel (+41 percent), Soybeans jumped $1.60 (+11.6 perce...
United States wheat prices, on a big run, are showing no sign of exhaustion, even after a move up of $1.90 per bushel in just 12 trading days in Chicago, reaching $8 for September futures on Tues- day morning. Portland white wheat has captured well over $1 per bushel for new crop in the same period, reaching $7.80 Tuesday morning. Virtu- ally all of this price enthu- siasm has been generated by drought conditions in the Eastern corn belt (Indiana, Illinois, Tennessee), but the heat has now begun to stress the entire Midwestern row- crop area. A...
In the last week, the market has added $14 million or more in value to this summer's Walla Walla County wheat crop. White wheat for delivery to Port- land, Ore., at harvest was worth $6.65 to $6.85 just more than a week ago on June 15. As of Tuesday morning June 26, bids for the same wheat were between $7.45 and $7.50. Who to thank? The hot weather in the Midwest that is stressing the corn crop. Weather models con- tinue to forecast hot and dry weather for much of the Midwest. Parts of the Eastern corn belt -- Illinois, Indiana, and Ten-...
There are a couple of noticeable influences in the wheat and other market atmo- spheres this week. Grain prices are being driven upward by - surprise! - hot and dry summer weather. Crop size forecasts that had been consistently ratcheting higher week-to-week through May are now giv- ing back. The swift plant- ing progress for corn and soybeans in the Midwest earlier this year set up high expectations, but now the plants are in a relatively advanced stage of develop- ment that calls for more moisture even as the sum- mer furnace goes...
At the end of May, 84 percent of Washington winter wheat was reported by USDA in good-to-excellent condition. Oregon was listed at 76 percent and Idaho at 91 percent. Spring-planted wheat in the Pacific Northwest is looking great, even though it was late getting into the ground due to excessive moisture. Canadian spring wheat planting has been delayed because of that moisture, so intended planting totals given a few weeks ago will likely show to have been a bit optimistic. As of Monday, June 11, the entire U.S. winter wheat crop is reported at...
In spite of the big, $1 per bushel spike in Chicago wheat prices May 15 through 21, the trend for wheat remains in a broad downward slope. It is very tough for wheat to advance directly into the teeth of harvest, even with the weather stories about dryness in Russia and frost on tender young North Dakota hard red spring wheat. We do not yet have the combination of factors that could allow wheat to rise beyond the upper edge of the 15-monthold downward price channel. The market played one of its best positive price cards in the mid-May jump, as...
In just five trading sessions during the last week, July Chicago wheat futures moved up a dollar per bushel, a fairly rapid move by most standards. White wheat in Portland managed a 60-cent move up for August delivery, from about $6.50 per bushel to $7.10 or so in response, suggesting that Chicago's jump was a little exaggerated. Usually the first move up from what now appears to be the seasonal lows takes a little more time to play out, say more like three weeks or a month. Most years, if climate conditions are average-togood, it is normal...
Risk...something that is always present in our world, sometimes less and sometimes more. The term gets used as if it is a kind of boogeyman monster that'll getcha if you don't watch out, so "it" has to be avoided at all costs. The reality is that risk is welded to reward. There is no return on any investment, including time, effort or money, without some form of risk. Even hiding gold coins under the floorboards of the back porch has its risks. Since most of us have some kind of investment, i.e. 401(k) or savings accounts, we all have to at lea...
Thirty-nine months have passed since February of 2009, when the stock market was at its lowest point since spring of 1997, a 15-year low! Twenty-five of those recent months ended higher than the previous month, 14 ended unchanged or lower, as the Dow Jones Industrial average has climbed more than 6,000 points, an 87 percent increase! It has been a profoundly powerful move right into an election year. Investors, even the small 401(k) kind, are feeling relatively relaxed today. All eyes on Europe. What does it mean, "antiausterity"? Will the...
The single, largest potential market mover for wheat (and many other commodities) today is China. This is a very old story, told over and over again through the years. Most market observers have become indifferent to melodramatic analyses of Chinese buying power for grains, as the reality never quite seems to reach the level of enthusiasm forecast. Recent developments have started up the talk again. Late last week there was a large sale of corn to "unknown destinations" announced by USDA's reporting system which the trade has assumed it to be...
The stock market has essentially accomplished nothing in the three months since mid-January. There is plenty of dithering about Spain, followed by Italy, then Portugal and so on. The elected course of response to these serial bailouts by the European Central Bank (ECB) and the International Monetary Fund (IMF) is basically to absorb the debts with international funds, ultimately supported by the U.S. dollar. It is well known that the stock markets require a "wall of worry" to climb, so we have no lack of climbing material. The doomsday commenta...
In the last week, Chicago May wheat futures prices have declined 30 cents from the quick spike high created at the end of March. White wheat for August delivery "new crop" in Portland declined about a dime to 15 cents in the same period, showing about $6.55, refl ecting a stable Pacific Rim market. There was a Tuesday morning USDA acreage and stocks report released before the opening of the trading session. For wheat it was a not eventful, as the survey of analysts showed previous guesses were spot-on, with an average guess of 792 million...
In the last week, Chicago wheat September futures were violent, printing a high at $6.94 per bushel Monday, and promptly collapsing to $6.43 by Wednesday. Then Friday, upon the release of the latest USDA statistics, the price screamed up to $6.95. That is 51 cents per bushel down and 52 cents back up between Monday and Friday. Might as well call it "volatility!" New crop (August) white wheat prices at Portland were a bit less exciting, down 17 cents, then up 15 with a net loss of about 2 cents on the week to settle at about $6.70 per bushel. If...
In a world where energy is most certain to come up in virtually any conversation, as well as any political speech, we all hang on sound-bites about crude oil. Every time the price of "black gold, Texas tea" rises a few dollars on the global market, we all get a new tax increase at the gasoline pump. At least it feels like a tax increase. So every day we all worry about what happens in lands far away where the stuff is pumped out of a hole in the ground and a nearly inconceivable amount of money flows back down the hole. One year ago, the price...
The big USDA report last Friday brought only a little news for wheat markets. Ending stocks of all wheat in the U.S. are expected to total 825 million bushels, a downward revision of 20 million from the previous official monthly projection. This was considered mildly supportive for wheat prices, especially next to the lower global wheat supply estimate for the year, which was given to be 209.58 million metric tonnes, some 3.52 million tonnes lower than the previous month's figure, which was itself a record high 213.1 million. Although for many...
We are becalmed in the center between wheat price potential highs and lows in a zone that has persisted since mid-November. Channels of this magnitude and duration (about 75 cents per bushel and 3.5 months) usually require something new entering the mind of the market to break out. The overall trend is a very mild upward bias, with higher highs and higher lows as the price ping-pongs slowly up the channel. The futures markets are labeled "futures" because they anticipate price. All available information in the possession of traders about where...
The sun comes up and the sun goes down, the hands on the clock go round and round...Life gets teejus, don't it! (Thanks, Hank.) But here's the thing; There is always opportunity, no matter what the world says on the Internet, or talk radio, or CNBC. Never mind how dark the political rhetoric gets. "The market" goes on. In our world there is an extreme need for honest price discovery that is fair and available to anyone for stuff we all need every day. Ultimately, it cannot be dependent on government permission, subsidies or requirements. But...
Wheat prices are in a period in lacking a story of its own powerful enough to push the market into new patterns, although with the spring weather season upon us, the market will be more interesting. Chicago contracts have confirmed the range again in the last few trading sessions, although since Dec. 15 lows, each low has been higher and each high also a bit higher, the definition of an uptrend, with swings of about 80 cents per bushel. The May contract low of $6.28 per bushel on Feb. 16 (repeated Tuesday the 21st) is now a key point to watch....
The wheat futures market has bounced off of a range high last week and moved lower since Feb. 6, as Chicago has trimmed 26 cents from the week-ago level of $6.70. Soft White wheat bids were actually up more than a dime in the same week, with current bids around $7.08 per bushel delivered to Portland, a reflection of good demand from the Pacific Rim countries for white wheat. For Chicago, that puts us just about halfway back down in the range, within a nickel of the center of the 5-month range. Whenever a market that has been trading in a range...
