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Discussion Starter · #1 ·
I know this has been threaded to death but something seems a miss, I believe that the organisations who predict crop yields are not going to make the mistake they made in the mid 2000's where they reported wheat stocks had fallen below 90 days supply for the world and hence we seen pretty high prices, now it seems there are disaster after disaster in cropping regions all over but they still predict a record harvest?

How do they actually calculate the predicted tonnes?
Do they ever release predicted tonnes against actual tonnes?
What percentage of grain is traded untraceable..I.e stock feed or container market?
How do they calculate world wide stocks, I can see how it's done in iron ore bit no idea how they do it for grain...
Obviously governments do not want high grain prices so food is cheap, so there is a conflict of interest when governments are reporting predicted tonnes?

I will go out in a limb here and say in the next 10 years we will see a dramatic price spike in grain like we have never seen, only a spike as one day the predicted will so far off the actual they will only be able to hold face for so long until panic sets in.

At present in Australia, milling wheat is around $270 AUS, in the UK it's a touch under $200 AUS.

Ant...
 

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Suprising how quickly wheat went from a small world stockpile to oversuply.

I suppose a large world producer has to have a disaster for prices to recover.
 

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I think when another country is your bank and you are in debt to them they can control every aspect of what you can do. Corn, soy, wheat, and alfalfa are priced not on supply and demand but what will China pay. Price not what they want, cancel contracts and the US panics and cheapens it up some more. The US government will let farmers go broke so they can keep borrowing from the money train China.
 

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There are thousands of analysts counting bushels. Mostly they are re configuring the numbers from the usda. The usda has people on the ground counting kernals and talking with farmers. Very small sampling though of course. The weather is a wild card that no one can predict. Right now everyone to a man is predicting low prices for a very long time. That should be your clue to a turnaround. The question to ask ourselves is can we afford to hold grain until the turnaround or just dump it and grow new grain and sell into the turnaround. One of these times the guy with full bins in July wins big time. I cant do it though but some of you will be able to.
 

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There are thousands of analysts counting bushels. Mostly they are re configuring the numbers from the usda. QUOTE]
Don`t put all your faith in the USDA, I have heard them adjust present numbers several times by adjusting stock numbers from 2 and three yrs back. I don`t know if there is a trust worthy grain stock reporting organization left.
 

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Yes we can fool with the numbers. However the only thing that really makes prices go up is when china puts in a bid to the usa for grain and the usa says "sorry we are sold out" Or when canada says sorry no number one high protien this year.(durum is $12) There has to be a real shortage of something.
 

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Discussion Starter · #9 ·
It just seems there I so grower organisations putting out figures? Our grains councils etc dont do it? I would have thought that grain grower organisations would do this as well, then see if there are large discrepancies? As far as stocks go, would it not be in the grain handlers interest to over report to keep prices down?

I'm sorry I just don't trust government anymore, in the last few years the amount of corruption that has been exposed in Australian politics is very disheartening, everyone pissing in everyone's pocket...


I wonder what would happen of one was to form a independent grain growers body for reporting predicted yield, likely quality, and actual yield? The only commentary I see is from grain traders, you know the drill, the Black Sea has a bumper crop, have you been to the Black Sea regions....spare me please...

Ant...
 

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As far as stocks go, would it not be in the grain handlers interest to over report to keep prices down?
Yep!...as it is in Grain growers best interest to talk stocks down. There is no such thing as an independent market report. If someone is going to the bother of researching and putting together a market report, you can be sure they will want a financial return on their investment.
 

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This market price action is about as organic as a case of Roundup.

There have been a number of the players "forced" out of the markets. GS is the "vampire squid" but has long been a check on the Cargill, ADM, Bungee influence in Chicago/Minneapolis/London etc. Now that there are no more "squids" trading Ag commodities there is very little in the way of balances for the big boys who are on the receiving end of the commodities. The .gov's have said no PD's in the grain pits and understandably the PD's have exited. In their place I would do the same.

The numbers are beyond suspect, just like all the rest. I have not checked any of the algo's to see if any changes have been made but it would not surprise me. Numbers can be adjusted to 5 years previous to the present report, the same way unemployment and the rest of them are. Very little of the data we receive is raw, most has been smoothed or adjusted. For example today's unemployment numbers are not calculated the same way they were in the past; Things like the "birth death model" are utilized to massage the numbers according to the .gov's needs of the day. There is a change every few years to make things sound better and the grains have some of the same sneaky little adjustments and assumptions in them.

The downward price run in the grains this year has been spectacular, straight down without even so much as a single dead cat bounce, ploughing through every piece of bullish news like a rocket sled on greased rails. This is way beyond suspicious.

Geopolitically there is some decent political reasons for the price to remain low. The volume of money printed up is staggering and any hint of inflation from this may spook the broader markets and that is unacceptable in this moment. Russia is once again the "enemy" and hamstringing it's ability to bring in foreign currency assists in the west's attempt to "win." This could also be done through the oil prices but nobody wants to piss off XOM or any of their friends and relatives so the grains get the boots put to it.

The global situation is becoming increasingly complex and with complexity comes risk. There are flocks of black swans circling, it is just a matter of time before one takes a giant dump on someones head.

The prices do not reflect supply/demand or risks in the world at all right now. There is likely a lot of finger crossing going on in hopes that nobody notices or trips.

Always remember that most analysts simply parrot the words they are provided with and most are talking their book. Today's market often reflects someone's wishes rather than everyone else's reality.
 

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Discussion Starter · #13 ·
Lander, well said!

MS, January is a long way off yet so we will so who wants to pay what! Thanks to som help from STO and others I have a reasonable amount of contacts to get rid off grain...just wish I had a truck! Going to be happy day on this farm when a truck is present...some will argue with me...but being small and most trucks doing grain transfers when I want to cart in the opposite direction or Geelong...not keen on going through this crap again...hopefully I can sell to same mob as last year...to me no truck is like having no shop front, everything that is sold off this farm now and the future leaves via a truck...

The end of the season will no doubt shape some interesting buying tactics I am sure...they will play on the misfortunate for sure.

Ant...
 

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Thanks Lander. I appreciate your comment!... in other words Smoke and Mirrors time again, I guess.
 

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The Australian harvest is going to have a higher than normal amount of forced sellers due to lack of forward sales and the style in witch the 2014 crop has been funded.
 

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Discussion Starter · #16 ·
MS I couldn't agree more, it will play right into there hands, plus some guys will need cash injection while they wait for hay to sell if they had to cut etc...

Ant...
 

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Just rember that the world grain market is like any other market supply and damand. If there is a lot of supplie in one area and not much demand there is down wards price pressure if there is lots of demand and not much supplie upwards price pressure. Look at the basics around Australia paints that picture.

There are lots of other pressures on the grain market some real, lots not and lots of people that have nothing to do with production or end use playing with it but that's not going to change any time soon.

I would think the Portland would be a positive local basic most of time as there is low. Grain production vrs high end use. Even if its just the freight component. Lots of grain from around here gose buy truck to Terang every year.

Madsnake
 

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It comes further up than Trangie. Two traders I deal with have head offices in SA and Vic.
If this inland rail gets built and they put grain wagons on it prices will level out for Eastern seaboard grain.
 
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