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| Any of you used to play Jenga? Remember ... the game where you took a block of wood out and hoped that the tower wouldn't fall. This wheat market, in my opinion, is about 2 moves away from a tumble. The tower is teetering...
Now Chicago and KC are going to go limit up for a few days on near months? I am watching for a point to buy puts (not directly short) wheat. Anyone else think the same thing?
Agrivisor, in the most recent FarmWeek paper, states, "USDA, at its outlook forum, forecast a 645-655 million metric ton world crop, one that would easily boost ending stocks. A crop that size would end the current panic, allowing prices to drop sharply." They also claim that a drop below $9.32 would signal a retest of the last low at $8.96 and a close below this would suggest prices will break back below the uptrend and establish potential back to $7.
Of course, these comments were before today and tonight's movement, so who knows? Someone is making a killing in the wheat market, and I don't think it involves bakeries buying bushels of wheat. Speculation and greed are the name of the game, and money can be made both ways.
July and Dec (Chicago) are both over $11. I would guess that July $9 puts will be selling in the low .20's in the morning... If, and I say if, wheat drifts back under $8... $1 profit. (Getting paid 5-1 on a bet that is probably around even money) Just my guess! | |
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Wheat - Can you say Jenga?
