Crazy Ivan

Wheat futures have rallied in the last month, gaining $1.50/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-May 1 was a three-day drop of $.41/bushel high to low, May 7-May 9 incurred a two-day price drop of $.325/bu high to low, and May 1-May 17 was a four-day drop of $.37/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 in which 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 farther this boat pushes out to sea, extending the rally, the more risk that will be involved chasing it.

In the Garden of NVIDA

Behemoth tech/AI company NVIDA saw its stock pop 9%, topping $1,000 after its Q1 earnings report this week beat forecasts once again. NVIDA now has a market cap north of $2.5 trillion, making it the third most valuable company in the world, just behind Apple, with Microsoft still holding the top spot at a more than $3.1 trillion market valuation.