john risk - wheat price direction?, page-47

Looking wet on the east coast this week.

And the less positive, although early days still.

http://www.bom.gov.au/climate/ahead/model-summary.shtml

FSU crops had a pretty favourable winter but face general dryness, in the short-term, as they come out of dormancy. Always a case of watch this space, this time of the year, which is why some farmers with minimal production certainty to sell new crop often hold a percentage of old crop into Q2.

I still don't like a market that rallies on the back of short covering, rather than underlying, end user demand. It's a house built on sand. Too many ifs right now. If FSU stays dry, if the US story plays-out, if the Ukraine unrest worsens, despite the only currently impacted port being responsible for less than 5% of Ukraine's wheat exports.

Nothing drastic about current stocks, so not sure how anyone could sensibly argue for mass shortages and general panic on the streets that is going to send wheat into the stratosphere. A more reasonable assumption is that while stocks are currently sufficient to meet world demand, it will take two, consecutively large world crops to bump carryout to a point where price comes under significant pressure. Of course, all of this doesn't mean price can't go higher. Just a question of whether you like to punt on relatively binary events or exercise caution. Probably varies greatly for a farmer as opposed to a punter playing with CFDs, as the stakes are very different.