Wheat Prices Just Hit a 3-Year High. How to Trade HRW Wheat Here.

Consider buying a put option (KEZ26) on December hard red winter (HRW) wheat futures.

See on the daily bar chart for the December hard red winter wheat futures that prices have recently screamed higher and hit a contract and three-year high. History shows major, rip-roaring bull markets in the grains tend to see bulled-up traders overdo prices on the upside virtually every time.

Fundamentally, the export pace of U.S. wheat sales has not been overly impressive recently. Also, while geopolitical tensions in the Black Sea and regional droughts have rallied wheat futures prices, global supplies of wheat are still not uncomfortably tight, and seasonal patterns are also a potential rally killer.

Consider buying a put option on December hard red winter wheat futures, with a downside price objective of $6.75 or below. The option expires on Nov. 20.

IMPORTANT NOTE: I am not a futures broker and do not manage any trading accounts other than my own personal account. It is my goal to point out to you potential trading opportunities. However, it is up to you to: (1) decide when and if you want to initiate any trades and (2) determine the size of any trades you may initiate. Any trades I discuss are hypothetical in nature.

Here is what the Commodity Futures Trading Commission (CFTC) has said about futures trading (and I agree 100%): 

Trading commodity futures and options is not for everyone. IT IS A VOLATILE, COMPLEX AND RISKY BUSINESS. Before you invest any money in futures or options contracts, you should consider your financial experience, goals and financial resources, and know how much you can afford to lose above and beyond your initial payment to a broker. You should understand commodity futures and options contracts and your obligations in entering into those contracts. You should understand your exposure to risk and other aspects of trading by thoroughly reviewing the risk disclosure documents your broker is required to give you.