Wheat plantings great for our trade!

Lowest wheat plantings since 1971 is great news for our carry trade

Great carry trade in Wheat!

My feeling is that there is currently a great carry-trade arbitrage opportunity in wheat..  Our trade is to buy December 2010 CBOT wheat / Sell July 2011 CBOT wheat..  The chart below shows clearly that the spread is miss-priced..

Gur could threaten world's return to sugar surplus ...

I'm long sugar in our fund for various reasons, but below find an interesting use of sugar that many may not be aware of ...

A revival in the popularity of gur in India could upset forecasts of a healthy surplus in world sugar production next year, and help underpin prices of the sweetener, a leading analyst has said.

The comments came as sugar jumped more than 3% in New York to cross 17 cents a pound for the first time since April.

Kona Haque, a commodities analyst at Macquarie, said that many forecasts, including the bank's own, of a return to excess world sugar production, after two years of deficit, assumed that increasing amounts of cane would continue to be diverted from making gur to manufacturing sugar.

Production of gur, a crude cane-based sweetener popular in rural areas of India, has taken a back seat since sugar prices soared, with US attaches in New Delhi expecting a fall of some 15% in output in 2010-11.

However, such assumptions may prove misguided, now that the correction in sugar prices since February has driven them below the price of gur, which typically accounts for about 40% of India's cane crop, Ms Haque said.

'Gur risk'

"Everyone is expecting India to show a big increase in cane production," Ms Haque told farm investors.

"But we do no know how much will go to sugar as opposed to [alternative sweeteners].

"More manufacture of gur is an alternative option. That is one risk you do need to think about in terms of India's [sugar] production rebound."

Ms Haque added in comments to Agrimoney.com that gur was a risk to assumptions of a return to world sugar surplus, but felt that another year of deficit was "unlikely".

New Leadership in Aus - Good for our Coal investment

It looks like the proposed mining tax is going to be reviewed.. I am still very bullish on Mac Arthur Coal

By Candice Zachariahs


June 24 (Bloomberg) -- Australia’s mining stocks rose and the currency ended two days of losses against the yen as Prime Minister Kevin Rudd was forced out by his deputy, sparking speculation the government may change a proposed mining tax. Shares of resource companies including Macarthur Coal Ltd. and Riversdale Mining Ltd. led the increase in resources stocks, balancing losses in utilities and financial shares that saw the S&P/ASX 200 Index finish little changed at the close of trading in Sydney. Rudd’s popularity plunged after criticism from mining companies including Melbourne-based BHP Billiton Ltd. and London-based Rio Tinto Group over plans to impose a 40 percent levy on mining profits from 2012. Julia Gillard, who has taken
over from Rudd, said she was “throwing open the government’s door” to negotiate with the mining industry.

The wheat story continues - I am a seller of Sep wheat atm puts

Subject: Canada planting ends with 82 pct done-Wheat Board


14:38 21Jun10 RTRS-
* Crop insurance deadlines pass, no more planting seen
* Smallest W. Canada acreage of wheat, barley in decades

WINNIPEG, Manitoba, June 21 (Reuters) - Wet conditions limited planting by Western Canadian farmers this spring to only 82 percent of the original planned acreage, the Canadian Wheat Board said on Monday.
Farmers are not expected to plant any more, after the final crop insurance deadlines passed on Sunday, the Wheat Board said. Crops seeded this late have a good chance of not maturing before autumn frost. Farmers are expected to plant their smallest acreage of wheat, durum and barley in decades and leave up to one-fifth of  Western Canada's farmland fallow after record rains this spring, the Wheat Board said earlier this month.
Canada is normally the world's top shipper of spring wheat, durum and canola and the No. 2 oat producer.

I am a seller of Sep Wheat atm puts - and a buyer of Sep Futures/ selling Dec Calls agains the longs thus capturing the spread as well which is too high..