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  • Natural Gas: A New Milestone, Almost [View article]
    Although I have a substantial bearish position I do agree with the author. What keeps me from closing my position is daily weather monitoring, understanding that El Nino years bring milder winters, and unseen level of inventories.
    Nov 9, 2015. 09:33 PM | 1 Like Like |Link to Comment
  • The Reasons Why Coffee Will Move Higher [View article]
    Quite possible. Volatility has fallen too - this is a sign of approaching thunderstorm.

    Speaking of 2013/14 - there was not only threat of switching. In fact there was something much bigger - Sao Paolo region had nearly no rains during critical period of cherries development during first months of 2014. Prices exploded from 1.15 to 2.25. They briefly hit 0.90 in Dec 2013 and returned to "normal" levels of 1.15 so everyone relaxed. Then came big ugly kaboom. First signs of it came in Dec 2013 when prices advanced for no big reason but advance was short lived. This is what we had in the end of August. This year situation may turn bullish quicker because of smaller stocks (stocks in 2013 were plentiful) and adverse weather events (if they happen). So one needs to be very, very careful. We will be walking over thin ice during coming months.
    Sep 11, 2015. 11:59 PM | Likes Like |Link to Comment
  • The Reasons Why Coffee Will Move Higher [View article]
    El Nino has not officially started yet, do not say about monster El Nino. Rest is also gossip and wet dreams not reality. You do not know what developments come in next 3-6 months. Chances for El Nino are high, it is very likely but it has not officially started. So the strength is a question mark too.

    Coffee can shoot up or it can further go down to 0.90 per pound and stay there for some months. It all depends on weather. This year there were no frosts during July-August mind me reminding you. Come October - we will be watching rains and cherries development through March. Only then we will know more about next crop. This is how agriculture works.

    However there are two real things in this market: smaller production this year and market nervousness when prices broke through major moving averages. That's why I quit my shorts a week ago. But come another bump and I will re-evaluate the situation.
    Sep 7, 2015. 11:53 PM | 1 Like Like |Link to Comment
  • USDA - Bumper Crops Again; Forecasts Are Optimistic [View article]
    Andrew, your articles are a pleasure to read. An addition to your analysis:
    * Let's look at the ratio of carryover to demand. If you are good with accounting and I bet you are you agree that carryover to demand is like profit to expenses ratio (supply = incomes, demand = expenses, carryover = residual return).
    * This ratio WAS at the end of agri year 2013/14 for wheat/corn/beans as follows: 24.3%/9.2%/8.8%. I calculated these yields myself from respective balance sheets using WASDE numbers. In other words - after 2013/14 stocks of wheat equaled to 24.3% of annual demand, 9.2% and 8.8% - for corn and beans respectively.
    * After August WASDE the same ratio IS projected for 2014/15 W/C/S to be as following: 39.3%/12.8%/12.6%.
    * This means that stocks are anticipated to grow larger. In the end what matters is carryover - residual result for the year of operations.
    Every month USDA update numbers as for this forecast. This explains movements in June - July when these ratios were declared smaller by 1% across the board.
    Important note - market knows about large carryover stocks so do not be carried away with bullish dreams. Numbers won't just evaporate, growth potential is limited or none unless a serious disaster happens.
    Aug 17, 2015. 10:20 PM | 1 Like Like |Link to Comment
  • Natural Gas - Mispriced, Overlooked, And Poised To Rally [View article]
    El Nino brings wetter summers and milder winters. This explains imo.
    Aug 10, 2015. 09:59 PM | Likes Like |Link to Comment
  • Sanctions And Commodity Prices Continue To Squeeze Putin And Prices Lower [View article]
    No one invades Russia today. Quite the opposite.

    Well, long story short - present government is very unfriendly to Western business and they did a very good job destroying good image that was carefully built bit by bit since mid 80s.

    One may say 'buy when it is blood on the streets' - OK, no argument about that but there will be more of it unfortunately so present buyers are about to lose a fraction of value before things return to growth. This KGB-gang is not able to compromise and is not about to stop until it is forced to stop. I would not be a buyer until then. Things may turn very ugly - they already talk about confiscation of foreign-owned assets. Still want to be a buyer?
    Aug 5, 2015. 02:29 AM | 1 Like Like |Link to Comment
  • Sanctions And Commodity Prices Continue To Squeeze Putin And Prices Lower [View article]
    You do not know history and make pathetic statements by looking at the map. Russia lost war with Japan in 1905 and de-facto lost World War I cause unlike France and Britain all it gained was a disaster - ruined economy, depressed new regions, army that hated its emperor (and many of them betrayed him a couple of years after). USSR also lost war in Afghanistan after 11 years of intervention. Now tell me about survivors of a war against Russia. They are no different than any other nation.

    Do you know that there is no electric/gas coverage in many regions of this 15 time zones swamp? Do you know that after 25 years of post-Soviet era of capitalism all they learn to do well is to sell resources not produce final goods? Do you know the scale of immigration, alcoholism and crime? No country can expect a bright future with such fundamentals.

    Russia will not share anything with foreigners, you are very, very, very naive to think like that. They invited and then cheated on many foreign investors including BP, GM, HP, and Morgan Stanley. Used and abused. Read their 'Law on Foreign Investors' before you join those "who seek to share abundance". There are many other masterpieces of legal nihilism but that one should be enough to give you a flavor.

    And I have not mentioned metastatic spread of corruption all over economy, society and government.

    All said above is based on my knowledge of the country, its political, economic and social conditions, living and working experience and my own origin. I was one of them.
    Aug 4, 2015. 09:41 PM | 1 Like Like |Link to Comment
  • Cracks Provide Support For Crude Oil [View article]
    Andrew, I would appreciate your comments on my thoughts below.

    I look at cracks charts (3-2-1, HO, RB spreads) and see that drops in crack values coincide with petroleums local bottoms and vice versa.

    Right now we are at the point of local top in 3-2-1 and RB spreads which may translate into further price softness as markets have accumulated enough strength and phase of slowdown is due. Spreads were incredibly low around 20th of Jan when CL hit the bottom. Low oil and low spreads translate into oil producers were unhappy and refiners were unhappy too. Together they turned the tide and prices went up.

    But we are NOT there today - oil producers may be unhappy today but refiners are happy today. Then why would they try to change present state of things? Oil producers and refiners are not allies today (although they might be the same people or related parties) meaning that there is not enough gunpowder to fight the bears.

    What do you think about this logic?
    Jul 27, 2015. 11:31 PM | Likes Like |Link to Comment
  • Natural Gas - Late August Surprise Ahead [View article]
    Although I have sold calls in natgas I do expect a bottom to sell puts and build a strangle USD2-3.5
    Jul 27, 2015. 09:34 PM | Likes Like |Link to Comment
  • Natural Gas Building Upside Momentum [View article]
    Jul 20, 2015. 11:17 PM | Likes Like |Link to Comment
  • Sugar Will Be Sweet Again [View article]
    I could say the opposite - after 1990 sugar price was below 10 cents for 2/3 of the time. Maybe things are getting back to "normal". You are a super bull, Andrew. Thank you for the article.

    The glut you write about is the thing that makes me sell more and more calls. If supply and demand equation is broken than what else matters? This calendar year at least.

    A couple of words re El Nino's effect - a year ago I did a study and wrote on it in my blog here at SA. In a nutshell - the only thing that was up most of the time during El Nino years was cocoa.
    Jul 20, 2015. 11:14 PM | Likes Like |Link to Comment
  • Grains: Second Quarter Review And The Outlook For Q3 [View article]
    A year ago wheat carryover to demand was 25%, this year about 37%. Other questions are subjective and depend on many things but focus on this yield change and look at price hike again. Numbers are plus/minus correct, took them from memory, no data in hand right now. Refer to WASDE.
    Jul 15, 2015. 08:19 AM | Likes Like |Link to Comment
  • USDA Leaves Yields Unchanged Despite Poor Conditions [View article]
    Indiana, Illinois, Ohio are about to take wet damage. But these states only a part (and not the best part) of corn and beans area and produce very little wheat. Rest looks good. I guess market exaggerates poor news.
    Jul 10, 2015. 11:38 PM | Likes Like |Link to Comment
  • Grains: Second Quarter Review And The Outlook For Q3 [View article]
    Grain carryover stocks are large. They won't just evaporate.

    Also, speaking of weather - some people mention 2010. This is not 2010. It was La Nina in 2010 that caused heat waves all over Northern Hemisphere - the US, Canada, Russia. They (the heat waves) started in spring and spawned one of the hottest summers. This is not the case today so do not charge overly bullish. We had a very good spring, summer is a bit wetter but the wetness is not in the most producing areas. See Crop Progress report - situation is alright and even improving. Europe is hot but this is not 2010.
    Jul 6, 2015. 09:04 PM | 1 Like Like |Link to Comment
  • Animal Protein: Meats - Second Quarter Review And Outlook For Q3 [View article]
    I second the motion. Looking at Hogs and Pigs report you can see a striking difference betwen 2Q 2014 and 2015 numbers. This can be very misleading as 2014 was not a common year. Look at 2013 vs 2015 - numbers will be the same. But prices between October contract in 2013 and 2015 differ by 20 cents. This imbalance will be corrected so jump in.
    Jul 6, 2015. 08:09 PM | Likes Like |Link to Comment