CBOT Owner Resists Wheat Restrictions

Wheat Markets

The attempt by the government to regulate and interfere with the wheat market could be another disaster in the making, as the completely foolish, misguided and clueless Democrats continue their assault on free markets.

According to Charles Carey, vice chairman of CBOT owner CME Group Inc., government restrictions on trading "are more likely to be harmful to the functioning of our markets than helpful," and he's absolutely right.

The idea that we should have some type of perfection in place so no one ever gets hurt is outrageous, socialist and fascist to the core. Short term fluctations in wheat prices will never last, and that's the illusory problem the goofy Democrats think needs to be solved.

Unbelievably, federal regulators are "seriously considering" restrictions in the wheat futures market being urged by lawmakers concerned over speculation they say has artificially inflated prices, supposedly interfering risk management by farmers and grain processors.

After a wasted year and time, a faux investigation by the investigative panel of the Senate Homeland Security and Governmental Affairs Committee found that the disconnect between the wheat futures and cash markets can mean higher prices for consumers. They say this with a straight face when corn prices and lack of planting of wheat does more to jack up the prices because of other government interference through subsidies from taxpayers dollars.

A number of senators have called on the Commodity Futures Trading Commission to restrict the volume of index trading in the wheat futures market on the Chicago Board of Trade, a completely ridiculous idea.

Foolishly, CFTC Chairman Gary Gensler told the Senate subcommittee at a recent hearing that the agency "is seriously considering this recommendation ... (and) will continue to closely monitor the performance of the wheat futures contract."

Democrat Panel chairman Carl Levin, ignorantly said such a review "is badly needed." Several other members of the committee, representing farm states, voiced concern about the impact of market problems on wheat producers in those states.

Again, to me much of this is to hide the real culprit in wheat prices, federal subsidies of corn for the failing corn-based ethanol industry, which is pushing up prices because of less acreage used for wheat because of the artifical price increases created by the U.S. government.

But an official of the company that operates the Chicago Board of Trade, where wheat futures are traded, opposed such constraints and disputed the Senate probe's findings, as mentiond above from Charles Carey's accurate comments.

The idea of attempting to manipulate the market by the U.S. government and Democrats will fail, as the utopian idea of reducing risk is completely foolish and always fails, and the wheat and commodities markets overall will suffer.

Commodity indexes include futures contracts for delivery in different months. Commodity index traders sell financial instruments whose values rise and fall along with the value of the index on which they are located.

Commodity index traders acquire wheat futures to help offset their risk from selling the instruments to third parties. That pumps billions of dollars into the market and lifts demand and prices for wheat futures, the faulty results of the Senate investigation found.

Other related to the risk factors are also whining about the alleged discrepencies, as one person representing the American Bakers Association and the Sara Lee Corp said at the hearing, "Bakers cannot escape the impact. Today's volatility represents millions of dollars daily in undue financial risk."

What this disingenous bureaucrat doesn't say is this has always been the case, and the those that manage this risk factor are the ones who win. In the stimulous and spirit of bailing out company after company, those that can't compete are attempting to make it look like something unusual is happening, when in fact it has been the practice and way of doing business for a long time.

The one who knows about this the best is Charles Carey, vice chairman of CBOT owner CME Group Inc., and he concludes that the findings of the Senate report "are based on faulty economic analysis and a misunderstanding of basic market economics."

Just look at what the Democrats and Obama are doing to destroy America with its socialist and fascist policies, and you can easily understand how this group of politicians are among the most inexperienced and naive in American history; in both foreign and domestic policy, and they need to just shut up and let the free market work things out, which it always has done.

Wheat Markets

Dry Weather in Argentina Pushed Corn Prices Up Slightly

Dry weather in Argentina gave corn prices a boost today, after falling to their lowest level in a month yesterday. Argentina is only second behind the U.S. in exporting of corn.

Projections are the conditions in Argentina will continue, as expectations are that less than 1 inch of rain will fall in the major agricultural regions of Argentina over the next couple of weeks.

Corn responded by moving up as high as $3.695 a bushel on the Chicago Board of Trade in electronic trade, while closing at $3.66-1/2 a bushel.

CBOT Limits Ag Receipts Held by Non-Grain Companies to Improve Performance of Hedging

In response to pressure over the last year, the CBOT has responded to requests from its regulator, the Commodity Futures Trading Commission, and will now limit the number of warehouse receipts and grain shipping certificates a non-grain company can hold.

This is especially targeted to soft red winter wheat contracts, to improve its hedging effectiveness, which has been dismal for some time. At the same time it'll help other grain contracts like corn, rice, wheat, oat, soybean, soymeal and soyoil.

Starting on February 17, the Chicago Board of Trade will enact the limits on the non-grain holding companies that hold grain shipping certificates or warehouse receipts, which will be given until May 31 to comply with the new rules.

Here are the parameters below:


Commodity - Limit


Corn shipping certificates - 600*
Soybean shipping certificates - 600*
Wheat shipping certificates - 600*
Soybean oil warehouse receipts - 540
Soybean meal shipping certificates - 720
Oat shipping certificates - 600
Rough rice warehouse receipts - 600

*Includes certificates for CBOT mini-contracts.

DJ CBOT Corn Review: Ends Higher On Crude; Unchanged On Week

CHICAGO, Jan 02, 2009 (Dow Jones Commodities News via Comtex) --
By Ian Berry
Of DOW JONES NEWSWIRES

Higher crude oil and short-covering pushed Chicago Board of Trade corn futures higher Friday, as the market extended its rally from Wednesday, traders said.

March corn ended up 5 1/4 cents to $4.12 1/4 per bushel, May corn ended up 5 cents to $4.22 3/4 and July corn ended up 5 cents to $4.33.

The market was a penny or two higher for most of the day and gained a few more cents before the close. It remains firmly above key support at $4 as well as its 50-day moving average at $3.85.

"The market has given a clear indication -- not just corn, but wheat and soybeans -- that the Dec. 5 lows were fairly major," said Joel Karlin, analyst for Western Milling.

Higher crude oil and U.S. stocks set a supportive tone, although there was little fundamental news to boost the market, traders and analysts said. Weekly export sales of 269,900 metric tons were weak, traders added.

Traders and analysts add that the rally from a low of $2.90 in the nearby contract in December has been in light volume, much of it around the holidays. Many expect the market will give back some of its gains once traders return and activity gets back to normal next week.

Karlin said following the Jan. 12 crop report, the market will have "a renewed focus on fundamentals" including prospects for planted acreage this year.

Weak demand across all sectors continues to limit corn's gains, analysts say, and corn's recent gains will only hinder any rebound in demand.

Funds bought an estimated 1,000 contracts. Although the market closed higher for the third straight day, the March contract ended unchanged on the week.

CBOT oats ended slightly higher. March oats ended up 2 cents to $2.12 per bushel, May oats ended up 2 cents to $2.21 1/4 and July oats ended up 2 cents to $2.30 3/4.
Ethanol futures were mixed. January ethanol ended flat at $1.620 per gallon and March ethanol ended up $0.005 to $1.654.

-By Ian Berry, Dow Jones Newswires; 312-341-5778; ian.berry@dowjones.com
(END) Dow Jones Newswires
01-02-09 1543ET
Copyright (c) 2009 Dow Jones & Company, Inc.

DJ CBOT Corn Review: Up Slightly Amid Pre-Holiday Positioning

CHICAGO, Dec 22, 2008 (Dow Jones Commodities News via Comtex) --
By Ian Berry Of DOW JONES NEWSWIRES

Chicago Board of Trade corn futures inched slightly higher Monday in light, pre-holiday trade, with weak demand limiting any bullish sentiment, analysts said.
March corn ended up 1 cent to $3.81 3/4, May corn was up 1 cent to $34.92 and July corn settled up 1 1/2 cents to $4.02 1/2 per bushel.

Prices had been a couple cents lower for most of the day before mounting a mild rally late. The market tends to gain in the days leading up to Christmas and the day after, and some traders "will try to pick up on some of these statistical tendencies to try and pick up a few pennies here and there," said Arlan Suderman, analyst for Farm Futures.

Some analysts said China's reported purchase of 20 million metric tons of corn was likely supportive, although not a clear factor in Monday's trade. Analysts questioned its long-term impact.

"It seems like the higher Chinese market is what gave it its support on the open," said Chad Henderson, analyst for Prime Ag Consultants. "But when the dust settles on it all, it just looks like they're trying to support their domestic prices. It does nothing to alleviate the glut of grain on the world market."

After climbing $1 from its recent low, lingering weak demand has kept corn from climbing any higher, analysts added. Demand in exports, ethanol and feed is all weak, they said.

You have the corn farmers saying 'man, I don't want to give my corn away at $3.50 cash,' and you've got the hog farmers saying 'look, I'm losing money on $3.50 corn,'" Henderson said.

Volume is expected to be light all week because of the Christmas holiday.
The trade continues to eye weather in South America, which some analysts say is supportive because of dry crops. Others say the region appears to be getting enough rain.

CBOT oats futures ended flat. March oats closed at $2.19 per bushel and May oats closed at $2.28.

Ethanol futures were lower. January ethanol ended down $0.011 to $1.559 per gallon and March ethanol ended down $0.010 to $1.570.

-By Ian Berry, Dow Jones Newswires; 312-341-5778; ian.berry@dowjones.com
(END) Dow Jones Newswires
12-22-08 1545ET
Copyright (c) 2008 Dow Jones & Company, Inc.

Cold Weather Drives Up Weekly Wheat Prices

With the bulls concerned over the first strong cold weather of the season possibly may damage the dormant wheat crops, prices for the week ended up.

Even though Friday prices were softer, the overall week had KCBT wheat rising by 44.75 cents to $5.83 a bushel, MGE grew by 35.25 cents to $6.2525 a bushel and March CBOT led them all, gaining 50.25 cents to finish the week at $5.6325.

Although there was worries over the weather, a number of meteorologists suggested the cold spell probably wouldn't do enough damage to the crops to make much of a difference. Even so, prices rose on the possibility.

Weather will be especially rough in the central and southern Plains, with below-zero forecasts in the mix. Some of the concern was directed to areas that had little or no snow to protect from the bitterly cold temperatures.

Of course it won't be known until the spring if the dormant crop really had any damage to it, so it's a wait-and-see game at this time.

Spring wheat traded on the MGE hasn't been planted yet.

Wheat Rises as Australian Harvest Delayed by Drought

Wheat rose today on news in a statement from the Australian Bureau of Agriculture and Resource Economics which said drought conditions could significantly delay the Australian wheat harvest, and also could have a detrimental effect on the quality of the grain produced.

This seems like it's only a upward blip in the road, as there's so much wheat available for export this year, any news will cause a slight upward movement for wheat.

The December crop report from the Australian Bureau of Agriculture and Resource Economics shows wheat exports for the country are expected to reach 12.3 million tons, a significant increase from the 7.5 million tons exported last year.

With Australia attempting to compete in the premium wheat market of Taiwan, this probably couldn't have come at a worse time.

At 10:30 a.m. today on the Chicago Board of Trade, wheat futures for March delivery rose 2.5 pecent to $4.93 a bushel.

Good Condition of U.S. Winter Wheat Crop Causes Prices to Drop

The U.S. Department of Agriculture report was so good for wheat, that it has exceeded last year's condition by a whopping 55 percent for the same time frame.

As of October 26, 65 percent of winter wheat was in either good or excellent condition said the USDA report.

With the plethora of wheat available, wheat futures dropped 15.5 cents to $5.14 a bushel on the Chicago Board of Trade.

Much of this abundance came because farmers saw the amazing price of $13.495 a bushel on February 27, and so planted far too much, thinking it would profit them. Unfortunately, they never seem to learn that once the price has elevated to such levels, there was no way it could continue on because of the obvious surge in planting, which would ultimately drive the prices down, as supply increased. That, of course, is what has happened.

Another key factor has been the abundance of rain, which along with the huge sowing, has produced a huge crop.

Global wheat harvests could increase by 11 percent to reach a record of 680.2 million tons. It's also estimated that stockpiles around the world could grow by 21 percent to 144.4 million tons, according to the USDA.

USDA Raises Monthly Corn Forecast

The monthly forecast by the U.S. Department of Agriculture on Friday reported corn production for the year could be a much higher 12.2 billion bushels, a significant increase over September's projection of 12.1 billion bushels.

While wetter weather has a strong impact on production, the resultant success will probably put more downward pressure on corn prices, as the agency revised its season-average per bushel to a range of $4.20 to $5.20. That's a drop of 80 cent from September's estimate.

At the end of Thursday's session on the Chicago Board of Trade, corn for December delivery ended at around $4.38 a bushel.

Corn Prices Move Up After Fed and Other Central Banks Cut Interest Rates

Corn for December delivery on the Chicago Board of Trade climbed by 10.5 cents Wednesday after the U.S. Federal Reserve and several other central banks around the world cut their interest rates. After the interest rate cuts corn did rebound settling at $4.275 a bushel on the CBOT, a 10.5 cent or 2.52 percent gain.

While many other commodities dropped, which temporarily made central banking officials feel good because of the usual response of inflation emerging from declining interest rates, corn was one of the few that responded in the positive as demand falls because of a variety of inflationary pressures.

Interest rates in the U.S. were cut from 2 percent to 1.5 percent in hopes of stimulating the economy. Other central banks working in unison with the Fed cut rates by half a percent as well.

US Wheat Plunges on Economic Fears and Pressure

Commodities continue to take a beating as the markets worldwide become under increasing pressure. Wheat suffered along with most others as they tumbled on all the exchanges.

Along with the economic conditions, other factors were the stronger U.S. dollar and the drop in price of soybeans and corn. A stronger U.S. dollar makes investments in commodities less attractive to foreign traders.

The outlook for 2008 through 2009 looks somewhat grim for wheat, as outside pressures of the global economy continue and the projected record wheat crop drives prices further down.

Along with U.S. wheat production, Canada is raising its wheat production forecast, as are many other countries.

Much of that is because of increased number of acres being planted in wheat as well as expected good weather conditions.

On the Chicago Board of Trade December wheat dropped by 45 cents to $5.95 1/4 a bushel for December. December wheat on the Kansas City Board of Trade fell 42 1/4 cents to $6.28 1/4 a bushel, while December wheat declined by 38 cents to $6.64 3/4 on the Minneapolis Grain Exchange.

US Wheat Follows Other Commodities Down

With no fresh news on underlying wheat fundamentals, the grain followed other commodities down based on the unsurety of the economic bailout of the financial sector in the U.S.

December wheat at the Chicago Board of Trade fell by 20 1/4 cents to $7.16 a bushel as investors held back with the weekend coming up and the economic uncertainty.

The Kansas City Board of Trade followed suit as it came under pressure as well. December wheat fell by 19 1/2 cents to $7.16 a bushel.

There were also concerns about demand needing to increase after Egypt and Iran decided to acquire wheat from Russia this week.

As usual, the Minneapolis Grain Exchange followed in the footsteps of its CBOT cousin, also experiencing a decline to $7.89 3/4 a bushel, a 16-cent fall.

Traders are looking for direction from the quarterly grain stocks and small grain reports by the U.S. Department of Agriculture at 8:30 a.m. EDT Tuesday. Although an estimate, it'll help give a better picture on the actual usage of the grain.

It is thought at this time that the report will say wheat production for August fell from the expected 2.462 billion bushels originally estimated to 2.459 billion bushels.

Wheat Joins Commodity Rally as Investors Flee Equities

With the U.S. dollar falling and investors fleeing equities, the commodity market surged today as many of the dollar-denominated commodities enjoyed a significant uptick. Wheat was part of the swing.

Wheat futures in the U.S. increased by 5 percent Wednesday, moving up from its lowest level in over a year.

December wheat futures on the CBOT ended at $7.25-3/4 a bushel, up 35-3/4 cents, a 5.18 percent move upwards.

Even the news that Egypt decided to buy 205,000 tons of wheat from Ukraine and Russia wasn't enough to pressure the grain, as numerous economic factors lined up to give it a solid push forward.

High global wheat inventories have been putting downward pressure on wheat prices recently.

Corn Rides Returning Favor of Commodities as Investors run for Cover

December delivery for corn increased by 22 cents a bushel, riding the migration of investors to commodities as they seek shelter from the financial markets. Corn closed at $5.54 a bushel on the Chicago Board of Trade.

Most dollar-denominated commodities were benefactors of the exodus from equities.

Soybeans were also up on the day, increasing by 26 cents to $11.39 a bushel, a 1.3 percent jump.

The U.S. dollar index was down as the greenback fell against most major currencies.

Wheat Climbs to Eight-week High On Weak Dollar, Surge in Crude Oil

Wheat enjoyed a comeback on Thursday, as it reached an eight-week high, as crude oil helped lift it up, along with a weakening U.S. dollar. Corn and soybean increases also helped push the commodity upwards.

On the CBOT, December wheat ended the session up 22 3/4 cents at $9.22 1/4 a bushel. December wheat at the Kansas City Board of Trade finished at 23 1/2 cents higher at $9.50 3/4, while December wheat at the Minneapolis Grain Exchange ended the session at $9.82 1/4, a 27 1/4 cent increase.

U.S. wheat export demand should remain strong, as weekly export sales for 2008-09 for the U.S. is at a marketing year high of 916,500 tons. The average of 522 million bushels of export wheat sales is about 10 percent above the five-year average. Wheat shipments are running at about 37 percent higher than the five-year average.

CBOT Corn Futures Surpass $6 First Time in Almost Three Weeks

For the first time in about three weeks, corn futures on the Chicago Board of Trade surged past the $6 mark, as the U.S. dollar weakens on stronger oil prices and geo-political concerns.

Nearby September corn on the CBOT increased by 22 1/2 cents to $5.97 3/4, and most-active December gained 22 1/2 cents to end at $6.17 1/2 a bushel.

One other factor in the price of corn futures is Midwest rain may not be enough to pull corn through to a strong harvest. It's also slightly possible that later maturity levels could make corn vulnerable to frost further on in the season.

Kernals now filling out may not be helped by the forecasted wet weather over the next 7-10 days in the midwest.

Corn exports also fell far below the projected 850,000 to 1.4 million tons looked for; only 691,500 metric tons sold the week ending August 14.

According to the U.S. Department of Agriculture, 196,600 metric tons were sold for 2007-08, while 494,900 tons were sold for 2008-09.

CBOT September Wheat Drops 14 1/4 cents to $7.65 3/4 a Bushel

Even though wheat partook in the plunge in prices of crop cousins soybeans and corn, it still held up pretty good taking all factors into consideration.

September wheat on the CBOT dropped by 14 1/4 cents to $7.65 3/4 a bushel, while Kansas City Board of Trade September wheat dropped 10 1/2 cents to $7.96, and Minneapolis Grain Exchange September wheat rose 1/2 cent to $8.53 3/4.

There were about 3,000 wheat contracts that sold on the CBOT today.

"I think, technically, it's acting fairly well," Alan Brugler, president of Brugler Marketing & Management, said of wheat. "I would attribute most of the selling to fund-type liquidation."

As far as their companion crops, November soybeans fell 47 cents to $12.22, while December corn declined 17 1/4 cents to $5.27 3/4.