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Wheat: No News is Good News

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Wheat: No News is Good News


WHEAT:Wheat has recovered from 2017 lows set back on August 29th. The recovery, however, is running out of momentum. The market is still looking for direction albeit I think a temporary bottom has been reached. Where no news is good news, this proverbial phase does not entirely elucidate the state of the Wheat market. Such a trivial recovery is just a reaction to an oversold market which occurred on August 29th, as mentioned earlier. I still have a buy on Wheat, albeit a weak buy. Given the advancements in technology allowing for a continuous annual improvement in yields, prices over the next few years will continue to decay to a new trading level. If I had to guess it would around the mid 3.50ish level. Moreover, not helping the Wheat prices will be the grocery price wars breaking out between Amazon, Walmart, and Kroger. This will only benefit the consumer as they take advantage of lower food prices driven by both the advancements in technology and the aforementioned price wars. In any event, even though wheat prices are still in dire straits, I’ve gone long the commodity on a day-to-day basis but watch this space!

Where one algorithm points up and the other points down, I’ll stay with the direction of the short-term bounce i.e. long Wheat. Please bear in mind this is a day-to-day call and can change in a seconds notice. In short, there is still WAY too much of this commodity just hanging about, and this always spells Sell.

MORNING CALL and Recommendation:

We are Long @KW given both Algorithms point to the upside.


Long: @KW (Hard Red Winter Wheat)

Price: 426.25 (8/29/2017) (continuous contract; contract adjusted)

Current Price: 441.25 (9/10/2017, 8pm CST)


+251.00 (as of January 2nd, 2017; per 1 contract)


For farmers/producers looking to put on a hedge please give me a call for a no obligation free quote. I’ll be more than willing to visit your farm and explain how a hedge works, obviously at not costs to you. Please visit our website: www.royalhighlandadvisors.comor call me at 920-319-1444. Email:,,

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About the author

Phil McKnight has a Bachelors Degree in Accounting from the University of Arkansas (Fayetteville), a Masters in Business Administration from Northeastern University, a PostGrad Diploma in Personal Financial Planning from the University of California (Los Angles, UCLA), and a PhD in Finance from the University of Bath (England, UK). Phil graduated with distinction/summa cum laude from UCLA.

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