Day of a wheat trader

8.30 – arrival in office. Quick check on emails, call to Tokyo to check on eventual overnight negotiations. Call to Melbourne to check on origination program for Australian wheat.

8.50 – read other emails and respond to some easy ones

9.15 - check on positions, ongoing shipment program. Has overnight news impacted the short –term and /or longer term view on the market?

9.45 – discussion with colleagues of the wheat desk on short and long-term game plan. Confirm everybody is still in agreement.

10.00 – discussion with other grain and oilseeds traders. Have they seen some important or interesting developments? Has their game plan changed as a consequence?  Will it impact my outlook on the market and hence my game plan?

10.45 – a surprising call from China. They want offers for 250.000 tn of US wheat for immediate shipment. What is going on and what has changed?  Decide to offer at full replacement costs. Offer valid till 12.00 Geneva time.

11.10 – check on developments in Japan. We did not sell so far but some trades have been done and market has a tendency of moving up, possibly on the basis of the surprising news out of China. We withdraw our offers for the time being.

11.45 – an early morning call from Buenos Aires. They advise that a surprise strike in all Argentinean ports will be announced later today. Unclear how long it will last. That might however explain why the Chinese are in the market since they had planned shipments out of Argentina. The must have learned earlier than us about this development. Not acceptable!

11.50 – The Chinese confirm a purchase of 100.000 tn. Learned that competition has sold the other 150.000 tn

12.10 – Short meeting with the other department heads, the freight department and legal staff to analyze the Argentinean situation. Buenos Aires participate in the meeting via a conference call.

To consider:

  • impact the market and if so how
  • can other countries pick up the lost supply in wheat? Are there alternative other crops available at competitive prices (corn, sorghum, barley etc)
  • exposure to the strike; outstanding open contracts and vessels in line up
  • eventual contractual implications

12.45 – email with recap of situation and our analysis to major offices

12.55 – advise the forwarding about the strike in Argentina. Further check-up by them on shipments, contracts etc.

13.00 – time for a quick lunch and a game of tennis.

14.30 – back in office and check on developments in Argentina and the market. No follow-up in the market after the initial flurry of buying interest from China.

14.45 – discussion with counterpart in the USA to follow up on email of late morning. The USA will have to pick up the slack in demand if Argentina cannot export due to strike. There is no free port capacity in Black Sea since they are in the middle of the harvest and the start of the export program. We may assume that the EU does not have the right quality. Recently there have been some quality problems with delivery of EU wheat out of France and Germany to China; possibly also linked with fact that China did not like the attitude by these 2 countries in allowing a visit by the Dalai Lama.

15.15 – we have decided to see whether we can replace the sale to the Chinese in buying Canadian wheat. Since the Chinese do not buy Canadian wheat, this will only serve as a hedge. I will call a potential Canadian supplier. Have a quick check how his favorite ice hockey team in Montreal has done recently. He is so sensitive to these kinds of things!

15.30 – have been able to buy 50.000 tn Canadian wheat. He must have been in a good mood since his favorite team did win yesterday! Gave instruction to the foreign exchange department to immediately cover our Canadian $ exposure

15.35 – receive confirmation that the Canadian $ has been covered

16.00 – Discussion on our game plan for the CME/CBOT session. We decided to cover our short of today in covering 50.000 tn equivalent in the front end month since the strike might create a narrowing of the carrying charges in the market.

16.30 – opening of the CME/CBOT in Chicago. Chicago wheat opens a touch higher. At these levels we will only cover a small part of our short.

17.00 – discussion with forwarders to check on outstanding contracts/shipments that can be impacted by the strike in Argentina

17.45 – have a more extensive discussion with our freight department to check on the market and eventual actions to cover or hedged against outstanding commitments. We decide that despite the bullish news on the strike, the overall freight situation remains bearish so no need to do something short term

18.30 – discussion with counterpart in the USA to coordinate the overnight tenders in the Far East (150.000 tn in Taiwan and 100’000 in Korea). Also on how likely it is to see again buying interest from China. Conclude that this is not likely.

19.00 – discuss with freight department which freight level to use for the overnight tenders

19.30 – prepare tenders and follow the market in Chicago. During the session the prices have slowly come off and we should by now have covered our short position. Decide to put in additional buying orders for 25.000 tn in anticipation of upcoming business.

20.15 – CME/CBOT closed at unchanged to slightly up. We only bought an additional 10.000 tn. We decide to price our overnight offer at the close and send an email to our USA counterpart who will pass this on at his close of business to Taiwan and Korea.

20.30 – leave the office. Time for a beer!