Wheat follow up

I called out wheat Monday morning - already up 12% on that trade

As of the time of writing, September wheat futures are up approximately 60 points - around 10%.

I called that trade out Monday morning for paid subscribers.


What’s going on here? Why is wheat breaking out?

Not only is Kansas - who produces 25% of the US wheat - looking at possibly its worst crop in history, Russia is currently flattening Ukraine’s grain infrastructure after the collapse of the grain deal.


The Midwestern weather forecast is Dusk Bowlesque and a Wall Street Journal story quoted a Kansas farmer who said a lot of this year’s crop has been or is at risk of being completely abandoned.


While I take no pleasure in what’s happening - it’s quite bad for the world - my job is to find alpha.

If you zoom out, Wheat went to over $11/bushel last year on the mere threat that Russia could attack Ukrainian grain infrastructure.

This year, the US crop is looking bad. More than 90% of the exports from Ukraine were going to the EU. The French wheat crop is also looking very bad.

This year, the United States may be forced to support its allies with grain at a time that it can scarcely afford to do so.

Long wheat.

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