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Rivers, MB | Have read often that rallies in price that happen because of a production shortfall (almost always weather based) happen before the harvest happens. If I remember correctly, the best time to price grain in the last bad drought year in the US (2012??) was in June/July before harvest even happened. Is this common in all weather based/short supply rallies? Before harvest is the peak?
We have seen a good rally in spring wheat based mostly on dry conditions in ND, SD, MT and the southern side of the Cdn prairies. Trying to decide how aggressively to price spring wheat. Seeing prices yesterday of around $7.15 for #2 13.5 protein spring wheat. We have excellent subsoil moisture so feel comfortable pricing up to 1/3 of a normal crop. Can see that the rain forecast for next week could tank markets hard if it actually materializes. Realize we are getting too late for SD and a lot of ND but western Canadian crop is for the most part still early enough to recover with rain.
Only thing that concerns me is the Mpls spring wheat rally in Jan/Feb '08. Was any part of that rally a supply concern or was it really a few traders (the Canadian wheat board was one of the biggest from what I understand) caught very very short?
Natural tendency in a short supply type of rally is to assume price will continue to rally through harvest. But the corn rally in '12 would indicate to me that the trade figures out where the price should be far sooner than the farmer does.
Any thoughts I need to consider. | |
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question about weather markets- spring wheat specifically
