In the reporting week ending October 27, 2015, the net short positions of wheat speculators in Chicago fell significantly by 19,002 contracts to 33,264 net short positions. Prices on the stock exchanges have risen accordingly.
Although much is discussed and written about the grain markets on a daily basis, hardly anything substantial has happened in recent weeks. El Nino, Russia (politics and weather), precipitation deficits or even too much rain - the usual arguments only move prices slightly downwards or upwards. European wheat exports have so far been below the expected level, although the relatively weak euro exchange rate should have a supportive effect. Market participants are therefore eagerly awaiting the next USDA figures on November 10, 2015.
Prices on the Rhenish cash market have risen slightly in recent days and can therefore be described as stable. While ex-farm prices for bread wheat are currently around 170 euros/t, barley is trading around 12 euros/t lower.
Interesting are the producer prices to be achieved for the coming year, which are approx. 12 euros/t higher on the cash market and the futures market than the current prices for the 2015 harvest.
Therefore, if the intention is to sell, a partial sale of the coming harvest - if it has not yet taken place - can also be considered. The early hedging of the 2016 harvest is not about large shares, but what is wrong with 10-20% of the expected quantity? Many of the seeds are already in the field and what is wrong with a certain degree of security instead of pure speculation?
The net long positions of corn speculators in Chicago remained virtually unchanged at 33,600 contracts. Prices on the stock exchanges rose slightly.
There is also no improvement in sight on the maize market - which is largely determined by the USA. Ethanol production in particular is showing weaknesses, which are characterized by the low oil price but also by the dwindling willingness of the Chinese to buy the by-product DDGs from ethanol production.
