Weekly commodity wrap-up

Crazy Ivan

Wheat futures have rallied in the past month gaining $1.50 per bushel (28%) in both the front month KC and Chicago wheat futures. In that same timeframe there have been corrective dips of 4.5% or greater three separate times for the July KC wheat contract. April 29 through May 1 was a three-day drop of $.41 per bushel high to low, May 7 through May 9 incurred a two-day price drop of $.325 per bushel high to low and May 13 through May 17 was a four-day drop of $.37 per bushel high to low.

Russian wheat troubles are at the core of this most recent rally with both drought and cold snaps expected to reduce harvest significantly in three to four regions of Southern Russia. It is a storyline that is well known yet won’t be quantified until harvest in July and August at which point the rumors become fact one way or another.

Soviet era submarines were known for a maneuver where they would randomly circle back 360 degrees to check their backside before continuing their previous course. The maneuver was given the nickname “Crazy Ivan.” If you’re following too close, you’re liable to get caught, too far away and you lose the chase.

Good advice for trading wheat and just as difficult to pull off in real life. The further this boat pushes out to sea extending the rally, the more risk that will be involved chasing it.

In the garden of Nvidia

Behemoth tech/AI company Nvidia saw its stock pop 9% topping $1,000 after its first-quarter earnings report this week beat forecasts once again. Nvidia now has a market cap north of $2.5 trillion, making it the third most valuable company in the world behind Apple with Microsoft still holding the top spot at an more than $3.1 trillion market valuation.

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