Yesterday, one of the big headlines of the day was that the CPI inflation rate hit a 30 year high on an annualized basis. Obviously, the idea that inflation would be “transitory” we were told by the Federal Reserve at the start of this year has turned out to be dead wrong. I’ll have more to say about this tomorrow with some interesting charts, which will put things in perspective for you.
I just want to point out to you today that it looks like agriculture and soft commodities as a whole are now in position to breakout again. Seasonally, they have tended to peak out in the spring and actually fall into January, but now they are not doing that as you can see from this chart of the DBA ETF.
When more bearish seasonal trends get broken it becomes a hugely bullish sign. I talked about this in a post over a month ago.
I own the DBA ETF as a core position in my main account and IRA.
The price of wheat closed at a new 52-week high yesterday in the futures market and cotton is close to one as you can see from this chart.
Corn looks like it is getting ready to breakout.
I own several stocks in huge uptrends that are going up with agriculture commodities, such as CC, NTR, and MOS.
There are also two farmland REIT’s that I own – LAND and FPI.
Again when you see seasonal trends which call for a correction get broken that is a real bullish sign. Oil and energy are doing the same thing too. Typically oil prices peak in July and dips into November/December. Obviously, they haven’t done that this year either.