One of the hottest topics in the financial news right now is the powerful run-up in agricultural commodity prices. Case in point: On Thursday October 28, a Google search for "wheat" produced more results than that of "jobless claims" and "bed bugs" combined -- and that's after officials found evidence of the creepy crawlers in furniture at the United Nations building.
It goes without saying: Investors of all stripes have been "eating their Wheaties" and loving every "bite." Since June, wheat prices have soared more than 30%. That, however, was then. As for what the grain is expected to do now and into the future -- the mainstream experts can't seem to agree. As you can see from the news items below, the usual sources see wheat both going higher in a "super spike" AND falling precipitously in a post-bubble blowout.
See:
- "What falls most in two weeks on speculation demand for grains will shrink"
- "Wheat heads for longest rally since August on concern dry weather may damage US winter crop."
- "Wheat eases as US boosts world supply"
- "Wheat Prices Soar On Possible World Shortages"
- "Wheat inventories though May 31 will be the second most since 2001. Luckily, the US has ample stockpiles."
- "US Crop Fears Lift Wheat Prices"
Fortunately, you don't have to make the same shot in the dark. In the October 27 Daily Futures Junctures, EWI's chief commodity analyst Jeffrey Kennedy presents objective analysis of wheat's near-term trend changes. Jeffrey shows you the following weekly chart of wheat with a contracting triangle Elliott wave pattern clearly visible. (Some Elliott wave labels have been removed for this article.)
A contracting triangle contains five overlapping waves labeled A-B-C-D-E. Triangles occur before the final move in the wave pattern of one larger degree. In other words, once the triangle and the thrust that follows are complete, prices reverse. That's what we've seen so far in wheat: a rally that's correcting the previous decline. And if you see the larger-degree wave pattern, you'll have a good idea of where prices should go next.
The next big move in wheat could be big news. Get the full story today in the October 27 Daily Futures Junctures online now, absolutely risk-free.