Check out this 6-month chart:
Though unfortunately I am not basking in the full glow of this rally, because I own next year's contracts.
Why are contracts lower for next year? I believe because record high prices will prompt farmers next spring to plant more wheat - which should bring more supply on the market and drive down prices.
However that begs the question - where is this extra land going to come from? Farmers are currently planting corn from coast to coast at the expense of crops such as wheat - so that balance should swing back in wheat's favor next year.
Soybeans and cotton are the other two crops that often share land with wheat and corn - so keep an eye on these two. Soybean prices are relatively high, but cotton prices remain cheap - and perhaps part of this thinking is fueling the current rally in cotton.
Most Popular Articles This Month
The gold standard these days has been reduced to a distant memory and fantasy of hard money proponents. IF we returned to a gold standard, ...
Our soft commodity flavor-of-the-month, cotton, has seen its near term futures surge "limit up" for the second day in the row. Wa...
Last May we covered a Financial Sense Newshour interview with Kirk Sorensen, founder of Flibe Energy - he made the case for little-known ele...