Wheat (World) - Short Bias; Cheap Ukrainian wheat everywhere!
Updated
Sure, it is winter in the northern hemisphere so why even bother with the grains at all? ...
... Because cheap Ukrainian wheat had absolutely flooded European markets, so much so that very soon they will have to start dumping some of it into the ocean! (Right now, they are trying to air out these mountains of grain, so it wouldn't mold, but that will go only so far.)
Normally, this time of the year, 55-60 ships per week get loaded with Ukrainian wheat, headed for Africa and Asia.
As of last week, these numbers are down to 19 ships.
Russia closed the Bosporus to Ukrainian wheat (and oil seed) shipments.
As an alternative solution, Ukraine is shipping most of its harvest to the EU - mostly Poland & Germany - to load it on ships in those ports. - But guess what ...
... shipping it all to Europe AND THEN load it onto ships makes the whole proposition economically non-viable. (Well below producer cost.)
So now, the endless trainloads of grains, continuously pouring into the EU, gets dumped all over EU markets (at 40%-60% discounts!) because long empty local silos are all filled to capacity. There is now zero (0) storage capacity left anywhere in Europe! (... and the endless trainloads just keep on coming.)
... making this trade - not a monster - rather a no-brainer. (Like free beer)
... Because cheap Ukrainian wheat had absolutely flooded European markets, so much so that very soon they will have to start dumping some of it into the ocean! (Right now, they are trying to air out these mountains of grain, so it wouldn't mold, but that will go only so far.)
Normally, this time of the year, 55-60 ships per week get loaded with Ukrainian wheat, headed for Africa and Asia.
As of last week, these numbers are down to 19 ships.
Russia closed the Bosporus to Ukrainian wheat (and oil seed) shipments.
As an alternative solution, Ukraine is shipping most of its harvest to the EU - mostly Poland & Germany - to load it on ships in those ports. - But guess what ...
... shipping it all to Europe AND THEN load it onto ships makes the whole proposition economically non-viable. (Well below producer cost.)
So now, the endless trainloads of grains, continuously pouring into the EU, gets dumped all over EU markets (at 40%-60% discounts!) because long empty local silos are all filled to capacity. There is now zero (0) storage capacity left anywhere in Europe! (... and the endless trainloads just keep on coming.)
... making this trade - not a monster - rather a no-brainer. (Like free beer)
Note
p.s. Right now Polish farmers are forming a blockade on their eastern border, trying to stop any further Ukrainian wheat shipments. (Good luck with that!)Trade closed: target reached
Easy-peasyNote
Just as the endless stream of Ukrainian grain shipments keep rolling into Europe ...... So is this move bound to keep rolling, downhill.
Prices are a bit over-extended here and are likely to correct (Long), briefly - before continuing their downward march.
Play it accordingly (Long -> Short), marked in the chart.
Note
.. and the endless flood of Cheap Grains just keep rolling in.I have been Short this thing since the 7.80s (right after I've arrived to Poland to see it for myself). This was gonna be a quick hit-and-run for some extra cash. Since then, I keep lowering the stops (even too aggressively, one may observe) but this thing just keeps on ringing the cash register.
70% of all Ukrainian farmland is owned outright by US interests, e.g. this is US wheat (and 3 other, premier crops), all of it! That is, 40 million hectars (20% of the size of US farm land!) which produces 7% of the total global grain (and protein) on this planet. During a recent dinner with a Monsanto local vice president he eloquently reassured me: "Between Heaven and Hell, everything here is ours." I maintain zero doubt about the truth in what he asserted after a few cocktails. "These Ukrainians here are just farm equipment, stored overnight in their assigned barn slots - i.e. villages/homes." Again, the man spoke with no forked tongue!
The overall strategic idea here, as the present picture would clearly prove, is to flood the EU's main food producing countries with so much ultra-cheap (and Yes, in some cases free) cereal crops that it would be sufficient to put local food produces strait out of business, once and for all, creating a permanent US food dependency. So far, everything is running according to plan, (Look at the farmers situation in Poland, Romania, Bulgaria, Hungary and France. This year alone they have already worked for nothing, at a cost 3x higher than in previous years! One more growing season like this one and they are essentially done for, permanently.)
So, for the the doubters of American corporate power and to those who are hastily heralding the final days of the American Empire; "Say whaaat?! ..." The Empire is alive and well and it is in the process finishing off the last vestiges of any remaining European sovereignty because after the destruction of all EU energy pipelines other than those originating on American soil ... Good luck going without a sandwich - unless it is also US-sourced, much like all that "new energy" Europe now must rely on, exclusively. ("New energy" as in: From a new source; the United States ;-)
"Let me show you how empire works!" - Announced Augustus, the first Roman Emperor, to his generals as he instructed them to finish off 7000 of his own allies just so he wouldn't have to worry about them later on, during the peace that would follow the victory they have helped to achieve. He was not wrong!
Note
The cash register that just keeps on ringing;... And this is why one would only listen to the "street" if one's aim is to be dead wrong. - No exceptions!
Since all that hoopla about worldwide famines, food shortages, etc,. following the outbreak of war in the Ukraine ...
... World wheat prices have Halved, from $12 to $6 a bushel.
The reinforcing moral of this simple story is this: "People", "the street", "the news", "the experts" have always been wrong, categorically, throughout history, without fail, doomed to remain so for ever and ever! (Which is why I went to Poland and the Ukraine to see it for myself, +$3.00 ago.) I am still kicking myself, though, something fierce because I didn't manage to remain immune to all that noise. I have liquidated 2/3 of my short positions around $6.90 and now just riding what's left of it. Lesson learned, though!
ALWAYS trade in a hermetically sealed bubble after you attain a firm conviction on a trade! One could turn out to be right or wrong but in all cases "the opportunity cost" will ALWAYS outweigh any potential (imaginary) "protective measures".
In short; Always shoot for capturing the full Beta, as opposed to chasing, and trying to protect, some imaginary Alpha, which simply does Not exist! - Ever!!
The only Alphas that ever exist are ALL NEGATIVE, and nothing but, without exception!
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