Wheat Poised for Initial 2016/2017 Surge

10/30/16 INSIIDE Track: Outlook 2017

2013–2017, as emphasized dozens of times, was/is expected to time a generational shift – economically, monetarily & geopolitically.  It is expected to time the onset of a new phase of geophysical events – leading into a near-term crescendo in 2019.

Part of that discussion has focused on my expectations that the US Dollar would be going through a fundamental transition EVEN as it gained in value (see March 2013 discussion on Dollar Drawback, reprinted in Oct. 2016 INSIIDETrack).

That price rally – which could easily last into 2Q 2017 – was expected to disguise an under-current of steady Dollar ’attacks’ that would ultimately undercut the Dollar.  Although that analysis has been described in various ways, the simplest way of looking at it is through the lens of ’action/reaction’…

Action/Over-Reaction

According to Isaac Newton, for every action there is an equal & opposite reaction.  Note the key adjective there: ‘equal’.  That is the natural state of things.  Then there is the unnatural, a good description of what often occurs in the markets…

From an emotional perspective (which is what governs the markets), a little bit different principle often governs.  Let’s call it ’Hadik’s Principle of Action/Over-Reaction’.  (This principle often influences political discourse and conflict – on an individual basis as well as a national/international basis.)

“For many actions, there is an opposite & inflated (irrational) reaction… before cooler heads prevail and an equilibrium point is sought.”

That is what could unfold in the final years of this decade, a little like the final years of the 1970’s – one 40-Year Cycle ago.  It also has its parallels to what occurred during the final years of the 1930’s – another 40-Year Cycle ago – particularly in Europe.  And, it has its parallels to what occurred during the final years of the 1890’s – another 40-Year Cycle ago.  Of course, who can forget the final years of the 1850’s – another 40-Year Cycle before that…

That (1857–1861) is when the US government messed with Silver coinage (devaluing it by reducing the silver content of coins) – leading to the suspension of Silver, and then Gold, as currency.  That laid the foundation for the turmoil of the late-1850’s.

Internationally, the 1850’s saw a pivotal conflict between Russia & Crimea in 1853–1856 – in which Russia invaded Crimea.  In a déjà vu moment, Russia recently ’annexed’ Crimea in 2014.  Hmmmm.

At home, in America, regional/social/racial strife was escalating in 1855 as the nation became polarized (Bloody Kansas, etc.).  If I didn’t know any better, I would think there is a modern parallel unfolding in 2015-16.  Could the 40-Year Cycle (and its over-arching 80-Year Cycle) really be that accurate?!

War (UK) with China broke out in 1856 (lasting until 1860).  While no official war has broken out in 2016, China is doing her best to provoke one with developments in the South China Sea…

2017 – The Transition Year

As described since 2013, I expected one phase of activity in 2013–2017 and another – the result (or the reaction/over-reaction) to that phase – in 2017–2021.  2017 is the pivotal transition year in that analysis.  It represents the culmination of one phase of cycles… and the onset of another.

As such, it is likely to be a very volatile year.  Consequently, this is an excellent time – and a very necessary one – to step back and view the forest as well as the trees… and review what is expected in the coming years.  The best place to start is with some of the longer-term cycles – the 17-Year Cycle & the 40-Year Cycle.  Let’s begin with the 17-Year Cycle…

Wheat initially fulfilled the outlook for a multi-quarter (and potentially a multi-year) bottom in 3Q 2016 – the completion of a ~4.25 year high-high-(low) Cycle Progression.  A low in the second half of 2016 would also be a complete 7-Year Cycle from its  2009 bottom – the lowest low of the past 8+ years.

Wheat initially fulfilled that while completing a symmetrical ~8.25–8.5 year rally (late-1999–early-2008) followed by an ~8.25–8.5 year decline (early-2008–3Q/4Q 2016) – fulfilling an overall ~17-Year Cycle from the 1999 Major bottom.  However, it has not yet confirmed a low.

That could ultimately lead to a multi-year advance taking hold in 2017… a precise 40-Year Cycle from Wheat’s 3-year/150% surge of 1977–1980  (an inflationary period in most markets).”

Wheat is projecting a multi-year advance stemming from major, multi-year cycle lows in Aug./Sept. 2016 and the onset of an initial surge in 2016 – 2017.  That should be part of an overall advance into 2020 – corroborated by the 40-Year Cycle.  Food Crisis Cycles and Flood Cycles, intensifying into 2019 – 2021, reinforce this outlook.

The 4-Year Cycle Peak in Soybeans produced a corroborating peak in mid-2016 (May – July ’16; a precursor to a more dramatic peak in mid-2020) and reinforces this overall outlook for the late-2010’s.  See http://40yearcycle.com/wp-content/uploads/2015/06/INSIIDETrackSR201205Beans2012em.pdf for details and analysis on the last 4-Year Cycle Peak in 2012.