Have you farmers out there been naughty or nice?
I hope the answer is “Nice,” because Santa’s all set up to deliver the most wonderful present a farming business can receive: MONEY.
But this is no gift card from a store you don’t like to shop at, but cash in the marketplace. The markets couldn’t have set the old, red-faced, chubby and bearded fellow better. So let’s hope you all have been nice, and then he’ll deliver.
Let’s look at the set-up. Here’s March canola futures:
See how it’s tickling that resistance point there? Set up perfectly for Santa to give a shove and send it for another leg upwards. Unless y’all have been naughty.
How about oats:
Same thing.
How about spring wheat futures:
That’s already above a possible resistance level. Let’s look at corn and soybeans:
Those two U.S. mega-crops are extremely dittoish to canola and oats, methinks.
And you know, the whole commodities complex is in almost exactly the same position.
Dittowise commodities! (The canola, oats and CRB charts are for a longer period, hence the apparently steadier uptrend.)
Everything’s just sitting there, waiting for the Santa effect.
For those of you who don’t know, this is the time of year when the “Santa Claus Rally” tends to occur, which is a generally predictable rise in the stock markets from a few days before Christmas until New Year’s.
In commodities I don’t think it’s quite as predictable, but it looks to me like it’s trying to happen this year. There’s a general mood of bullishness about commodities out there, so we might get lucky going into 2011.
So think back over your year: have you been naughty or nice? What do you deserve from Santa?
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Worrisome drop in grain prices
Prices had been softening for most of the previous month, but heading into the Labour Day long weekend, the price drops were startling.
Let’s see what he gives us in these coming days.
