Archives: 2007 September

Bullish wheat data from the USDA sent futures to new all time closing highs at all three exchanges.

Some contracts traded limit up during the session, but late profit-taking and market-on-close sell orders trimmed gains, particularly at the CBOT and KCBT.

In its small grains report, the USDA slashed its forecast for total 2007-2008 U.S. wheat production to 2.067 billion bushels from its August prediction of 2.114 billion bushels. Other spring wheat projection was put at 479 million, down from 500 million. The USDA pegged quarterly U.S. wheat stocks at 1.717 billion bushels as of Sept. 1, down 2% from a year ago.

CBOT Dec wheat set a new high of $9.61 3/4 per bushel before closing up 6 cents at $9.39. KCBT Dec wheat hit a fresh high of $9.49 1/2 and closed up 9 3/4 cents at $9.291/4. MGE Dec wheat climbed to a new high of $9.14 1/4 before closing up 21 1/2 cents at $9.05 3/4.

With drought being a major problem in wheat production regions worldwide wheat stocks have fallen to dangerously low levels. Should long term climate change be coming into play a shortage of wheat and other agricultural crops could develop that will take prices to far higher levels over the next few years.

With wheat being such a widely used staple commodity a wheat shortage will result in almost immediate highly visible higher prices at the grocery store. With nearly all commodities in up trends look for an alarming dose of food inflation for 2008 and perhaps well beyond.

The CBOT is offering a free news service that they place a normal subscription value on of $119 a year.

The service is called “Commodity News for Tomorrow”. The service delivers to your email mailbox a detailed rap up of the daily commodity price action and commodity news at the Chicago Board of Trade.

The news letter will arrive shortly after the markets close for each trading day so you will indeed get a jump on the news that you will see in the next days financial publications. 

You will find a link leading to a subscription page at the top right of the CBOT home page.

Can anyone who looks at the CRB chart  posted below doubt that a heavy dose of price inflation is headed our way?

And who can doubt that a great bull market in resource commodities is underway? From corn, to wheat, to soybeans, to energy products new highs are being made.

This is not the time to bet against such a powerful trend. By buying into counter trend corrections and dips and hanging on profits should in short order be yours for the taking.

Of course, such an explosive bull trend can not be maintained forever. But while it lasts those who have good skillls at riding a tiger will make their fortunes.