One of the hottest commodities of 2020 is getting ready to run again. I’m not talking about oil and energy stocks, even though they turned up last week and look like they are going to rally more this week. I’m talking about the price of corn! Check out this ETF, which tracks corn prices and you’ll see the chart pattern it has formed.
After the March/April 2020 market meltdown, corn prices hit their lowest level in decades to form a secular bottom. They then put on a tremendous rally, which picked up steam in the Fall as the CORN ETF doubled in price. After that huge move, the price of corn and other soft commodities went into a consolidation period, much like oil prices did, that appears now to have reached an end.
Look for the CORN ETF to smash through this triangle pattern to the upside.
I don’t own it, but I do own the DBA ETF, which holds corn futures among other soft commodities. I also own various fertilizer and related stocks, which tend to go up when agriculture prices rise. Like the CORN ETF, these stocks also put on tremendous rallies going into this summer and entered similar consolidation patterns. One that I own, which looks like it has bottomed for a good entry point is CC.
I bought my position in DBA and stocks like CC last year in May and June and look at them as long-term investments to possibly buy more of on dips. We now got one in CC and it looks over as the stock rallied 9% yesterday. CC is paying a 3.17% dividend. Another stock that I own is farmland REIT LAND.
The Gladstone Land Corporation REIT is paying a 2.45% dividend from its portfolio of farming properties across the United States. It is the perfect way to benefit from both the real estate and commodity booms at the same time, imho.
When you have inflation you have rising commodity markets and vice versa, because that is what inflation is all about.
-Mike
