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
Nice simple breakdown of 3 of our favorite softs - coffee, cocoa, and sugar - by the folks at Money Morning. I did not realize the coffee ...
The markets presented quite the twist on Thursday, when the much anticipated relief rally got whacked in the face. Despite the hysterics an...
Last May we covered a Financial Sense Newshour interview with Kirk Sorensen, founder of Flibe Energy - he made the case for little-known ele...