I must admit my call is a bit of a gamble and I am not entirely thrilled about making it.
If its well known that there is not going to be a shortage of wheat, then this issue has already been dealt with.
From my perspective the key issues are this:
- Markets after a big rally normally put in a secondary rally to test the highs before falling futher.
- The greatest fall wheat tends to produce is a decline of 50% in 3 months
Ironically (not) the last time this event occoured was in 1974 after wheat prices rallied 440% in 5yrs.
This time we have had a rally of 440%ish in 5yrs and a sharp 3 month decline of 50%.
So banking on like conditions producing like effect wheat prices should rally to about $11.50ish by the end of this year early next year roughly speaking.
I find that possibility worthy of risking $0.50 considering prices don't appear to be in any rush heading south here.
