Don’t Sleep On Spring Wheat: CBOT Analysis

Don’t Sleep On Spring Wheat: CBOT Analysis
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The latest CBOT analysis from John Payne, Senior Futures & Options Broker with Daniels Trading in Chicago, discussing corn, soybeans, cotton and spring wheat trades.

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Q3 2020 hedge fund letters, conferences and more

Argentina Port Workers Strike Ends

“Argentina port workers strike has ended.  Argentina’s soy crushing companies signed a contract with the country’s oilseed workers union late Tuesday, ending a strike that has disrupted crushing and port activity since Dec. 9. There is now at least a 162-ship backlog to work through, according to the Rosario grains exchange. Soybean markets broke on this news, but have come back as overnight losses are pared and 13 remains in the eyes of bulls and January first notice day starts on the close.  The entire soy complex enters delivery near 6 year highs.”

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Tail RiskThere are many ways to define risk. Warren Buffett has said that "risk comes from not knowing what you're doing." Q3 2020 hedge fund letters, conferences and more His mentor, Benjamin Graham, believed that risk should be measured as the chance of a permanent capital impairment of an investment. Seth Klarman also holds this view. Read More

“Meanwhile, weather in Argentina remains threatening as nearly no rainfall exists in the 10 day forecast. Brazil looks to receive decent moisture over the coming weeks as the 1st crop bean harvest begins at the end of Jan.”

“US weather provides chances of rain for a lot of Texas but not the parched cotton areas in the panhandle as drought continues.  Texas producers tell me when it is dry like this, rains have a high chance of missing.”

“July cotton is only 1.5 cents away from trading at 80.  While corn and soybeans trade with a record long spec profile, cotton (and wheat) have plenty of room before hitting record levels. A strong Chinese Yuan is expected in 2021, as well as lower acreage due to high soybean and corn/milo competition.”

Spring Wheat Acres To Fall

“Speaking of competition, don't sleep on spring wheat. I expect more than a few producers who have been planting hi-protein spring wheat to make a switch back to soybeans.  Producers are looking at 6 dollar minny wheat or 11 dollar beans. While winter wheat acres have expanded in the eastern US, they are likely to fall in the northern regions as producers chase returns. I look for Spring wheat acres to fall to 11 million next year.”

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Jacob Wolinsky is the founder of, a popular value investing and hedge fund focused investment website. Jacob worked as an equity analyst first at a micro-cap focused private equity firm, followed by a stint at a smid cap focused research shop. Jacob lives with his wife and four kids in Passaic NJ. - Email: jacob(at) - Twitter username: JacobWolinsky - Full Disclosure: I do not purchase any equities anymore to avoid even the appearance of a conflict of interest and because at times I may receive grey areas of insider information. I have a few existing holdings from years ago, but I have sold off most of the equities and now only purchase mutual funds and some ETFs. I also own a few grams of Gold and Silver

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