I feel like a broken record – but this is one helluva ride! Wheat futures crossed the 800 cents mark this morning.
There are ongoing harvest problems contributing to the situation. Remember that wheat inventories are already at a 26-year low, so there is no slack in the system.
How high can prices go? Honestly I have no idea. I am not a buyer at these prices – things are just too crazy. I’m content to fasten my seatbelt and hang on for the ride.
As commodity investors (as opposed to traders), we need to keep things in perspective. Short term, I’m not sure where prices are heading (though I’d love to hear input from chart readers – Toby, any thoughts?)
I do know that next year, more wheat will be planted than has been planted in awhile. Where will the acreage come from? Corn, soybeans, and cotton. The cheapest crop will probably get shafted the most – and that looks like cotton at the moment.