BUY WHEAT. BUY GOLD. BUY SOUP.

WHEAT COULD REACH NEW HEIGHTS IN 2009

Droughts this year are going to squeeze already tight global wheat supplies. Parts of the US are severely dry like Texas and California. Elsewhere, China, Australia and eastern Europe are all experiencing extreme droughts. Financial mayhem has made it impossible for farmers to get credit for fertilizers so even with adequate rain, yields will be reduced. Another factor killing incentive to expand acres is the lower price compared to 2008. Liquidation continues with still almost 50% of open interest in wheat futures held by funds. A wild card is the stem rust fungus threatening wheat crops in Africa and moving west appearing in Iran. This is the making of another perfect storm with potentially devastating effects worldwide. Global stocks of wheat have recently come off 30 year lows. Even a modest reduction in 2009 yields could just be the trigger for civil unrest and mayhem. There are only 12 weeks of slack in the system. That’s it. It is not a pretty picture going into the summer of 2009.

Party time! Stimulation 2009 is here

1999 all over again

All systems a go for Stimulation 2009. Financials are saved, copper pricing in new demand in construction and electronics, wheat moving from the coming hunger of overworked bridge builders. Even silver is closing the gap on gold due to its industrialness. China is back along with India. Bulk shippers are cranking on all fours.

Shorting banks is so 2008. Staying long precious metals and agricultural. Oil, once floating overhang is worked off, should crack $50.

Good luck!