wantonwallet

WHEAT; ZW: A resistance turned support

Long
CBOT:ZW1!   Wheat Futures
A monthly bulldiv, a resistance turned support, and a falling wedge on the monthly that is breaking out (to the right) now, what else do you need?

In the Grain complex, farmers have stubbornly held onto their stores past the December 2023 sale period because they didn't like the prices. The storage basis has ticked up since then. Maybe one more month of high basis to really make the storers give up and sell what they've got in the bin. I mean why would you plant more when you still have stuff in the bin? Then I think the new planting season data in Mar/April we will find that planting is underweight on wheat, probably *still* overweight soybeans, and this is just very predictable stuff.

Bin stores Down, planting down ---> Price up

Fading the Soybean mania vs grain complex spread is a very easy agriculture trade. I already did that in a prior Rice vs Soybeans trade. Now Rice is at ATH and Soybeans is down, not because I am that good but because this trade is that easy. The same will happen in grains, which are depressed atm. Remember that livestock feed can be switched to Wheat or Oats or Corn at a moment's notice, and Soybean meal can get removed. This means new bids.

On the chart I really like $9.00 a bushel, just a great mean reversion target, don't get greedy just go for mean reversion. 58% is a tonne of PnL!