Will rising prices in hard red winter wheat make bread lovers suffer?

Hard Red Winter Wheat is one of the grain commodities, along with soft red wheat, corn, soybeans and others. Within the wheat family, first of all, there is a fundamental difference between two wheat types. Soft wheat is low in protein and is basically used in cakes in pastries. By contrast, hard wheat has a higher content of protein and it founds itself in breads and hard baked goods. Some time ago, trading of hard wheat took place at Kansas City Board of Trade. Then, it moved to Chicago. One can trade hard wheat futures at Chicago Board of Trade under the ticker $KE. Hereby, the contract size is 5’000 bushels (300’000 pounds) each and the prices are in Dollars US per 100 bushel.

Hard Red Winter Wheat Weekly Elliott Wave Analysis 12.02.2020

The weekly chart below shows the Hard Winter Wheat front contract IH #F. From the all-time lows, the prices have developed a cycle higher in black wave ((a)) of a grand super cycle degree. It has ended in March 2018 at 1148 Dollars. From the highs, a correction lower in wave ((b)) has unfolded as an Elliott Wave double three pattern. In 8 years, as a matter of fact, IH #F has lost 3/4 of the price reaching 296 Dollars per 100 bushel. It is the preferred view that an important bottom on October 2016 has been set and the black wave ((b)) has ended.

From the lows, consequently, a new rally within wave ((c)) may have started. Hereby, the cycle degree waves I and II have already ended, while above 365, wave III can extend higher and it can see 625-785 area.  For 2020-2030, the expectations are to break out to the new all-time highs. The long-term target for wave ((c)) to end will be 1444-2153 area.