Wheat Market Revisited: A Time Cycle Perspective
Is the 49-Year Cycle Signaling a Low in Wheat?
Introduction
As I start revisiting Wheat, it's fitting that I do so on a special day - the 6th of June, the birth date of the legendary W.D. Gann. W.D. Gann was a legendary commodity trader. This article is not just a tribute to W.D. Gann but also an expression of my greatest respect for his knowledge and a token of gratitude for the wisdom he shared in his work and whose ground-breaking work on time cycles continues to guide our understanding of commodity markets.
Whether you're an experienced investor or just interested in learning more, this article may offer valuable insights into the time cycles that W.D. Gann discovered and the complex interplay of supply and demand that shapes the wheat market.
In my December 2022 annual forecast on Wheat, as included in the Fiorente2 Stock Market Outlook 2023, I mentioned:
“Wheat is still trading below the 1x1 from crest 2022, and until this line is crossed from below, I remain bearish for the longer term. The mid-point of June 2023 is an important hotspot in price and time.”
May and June are often lows in Wheat, as you can see in the chart below based on 51 annual cycles of Wheat, but not in all years. There are years where lows are made a couple of months later.
As we are in the middle of this seasonal period where often seasonal lows are made, it is time to revisit the yearly forecast for Wheat.
As W.D. Gann mentioned in his Commodity course:
“Time is the most important factor in determining market movements because the future is a repetition of the past, and each market movement is working out time in relation to some previous time cycle.”
“A study of the various time periods and cycles will convince you how the grain market repeats the same price levels under the same time periods of some previous cycle.” W.D. Gann Commodity course
Remembering W.D. Gann’s words, it is worth revisiting the major time cycles for Wheat, to see where Wheat is trading relative to these cycles, what the probabilities are a low may have been set in Wheat, and how this may play out in Wheat in the future. You may also want to re-read my last post on Substack from August 2022 here again (click on the link), in which I discuss the several major cycles in Wheat.
Disclaimer: Hypothetical or simulated performance based on past cycles have many limitations. Cycles can contract, extend, and invert. Hence, past performance is no guarantee for the future. Trading futures, options, and stocks is a high-risk business. Fiorente2 Newsletter does not offer trade advice. Please read our full disclaimer.