What's with wheat futures?

[Monkeyleg]

I traded commodities for a few years, broke even, and got tired of doing it. So I really don't pay much attention to futures these days.

But I started paying attention when wheat was making moves of 30 cents a day. What's with that? Wheat was the most boring grain to trade, as it only moved a couple of cents either way.

I haven't been watching national weather, either, but I'm guessing that the plains states are getting socked with rain.

Am I right?

[Big_R]

My guess is all the farmers thought they were going to get $4.00/bushel corn so no one planted wheat.

I told my BIL to plant everything he had in wheat, but did he listen to me?  Noooooooo.

Ryan

[Brad Johnson]

It was kinda hard for them to get excited about putting in a crop when wheat's been hovering around the three dollar mark for so long.  Now that it's topped the five bill mark I bet we see a bunch more production.

Brad

[Monkeyleg]

Big_R, I was always told that it was corn and soybeans that were the interchangeable crops, and that wheat required a different soil or climate. Right or wrong?

[grampster]

Since we're now using food (corn) to run our cars, other crops will be more scarce thus more expensive.  The status quo in commodities, if you have the balls, will be meaningless, and money will be made in oddball neccessities.

[Manedwolf]

Wheat and barley more expensive = BEER more expensive.   

[RocketMan]

Wheat and barley more expensive = BEER more expensive.  

Damn, hadn't thought of that.  

[BakerMikeRomeo]

What's with wheat futures?

Well, y'know, I think tha-- Zzzzzzz....


Zzzzzz...

Zzzzzz...

~BakerMike
 

[Perd Hapley]

I think it has something to do with this thread:


http://www.armedpolitesociety.com/index.php?topic=8813.150

[Monkeyleg]

Grampster, you're right to an extent. Again, as I was taught, corn and soybeans are fungible crops. If one makes more money, plant that.

But wheat never figured into the equation very much back when I was trading futures. It was almost a sideline commodity.

These 30 cent moves represent $1500 per contract (just ask Hillary; she'll certainly be able to explain the process). These 30 cent moves are limit moves. I saw them in pork bellies and other volatile futures, but not in wheat.

[Jamisjockey]

My guess is all the farmers thought they were going to get $4.00/bushel corn so no one planted wheat.

I told my BIL to plant everything he had in wheat, but did he listen to me?  Noooooooo.

Ryan

I think its because of ethanol and government handouts subsidies.....they are planting corn because its more profitable.

[roo_ster]

Here in  Texas, corn is an iffy proposition.  The recent subsidies & mandates have had the effect of folks risking a bad/no corn harvest versus what they otherwise would plant.

I suspect a similar phenomenon occurs everywhere on the margins where one could plant corn or something else.

Toss into the mix the higher fuel prices due to the price of oil, refining capacity, fuel cocktail mandates, eth mandates, etc, and it is no wonder inflation is getting a mite frisky.

[Bigjake]

Big_R, I was always told that it was corn and soybeans that were the interchangeable crops, and that wheat required a different soil or climate. Right or wrong?

Both.

Wheat and Soybeans rotated yearly are great.  up until recently corn has been the hit or miss crop.  The best use for corn around here is chopped silage, not grain market (thank you, idiot eco-nuts).   Traditionally, Soybeans are where the money is. 

Soybeans also beat many locals around here in the 70's when for a couple years they went for BIG money, and a bunch of morons went out and bought lots of new land and fancy equipment on the promise of Beans continuing profit, which proved to be a huge FUBAR 

as for soil/climate, Ohio is good for all three.  can't comment on it otherwise .