The expected rivers of wheat flowing toward Minneapolis are thus far just babbling brooks trickling in...
MGEX deliverable stocks in Duluth are only up about 1.5MM bushels from the pre-harvest lows, while in recent years we have seen inventories jump by more like 5-9MM bushels by this date. Maybe it's just a little late.
A late harvest explains why Sep is trading 40 cents over Dec, but it doesn't account for why every spread for the next year is in backwardation. That indicates a tight market even after the harvest.
I'm maintaining smallish long MGEX wheat futures positions vs CBOT. The chief worry on these is that CBOT wheat is already so cheap vs corn: Dec CBOT wheat is 20 cents under corn.
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I would say the average wheat yield in W MN (RRV) is 20 bu below last year. I'd put last year at 60 bpa, so that's a 33% decrease in production.
ReplyDelete....my wheat yields come from 30k+ acres of actual production reports from Fergus Falls over to Breckenridge up the RRV to Crookston
ReplyDeleteYeah, the bullish story for Minneapolis wheat is still there, but is it a better story than cheap, cheap 20 cents under corn CBOT wheat...
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