Everyone’s been waiting for the bottom to be reached and left behind in the ag commodity markets.
For a few days there’s been a nice little rally in the main crop futures markets, and even though today isn’t a great day, the hopes for a rally that eventually makes the early December lows the year’s lows is still intact.
Look here at this Chicago Board of Trade chart for its winter wheat contract:
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That’s a nice little ladder of a rally out of the depths so far. But will it continue? There have been a few little rallies in the past couple of months, the clearest being that late-October/early November rise that proved to be just an upward correction to the big slide downwards. And after that there were a couple of abortive moves up that didn’t lead lastingly higher.
But this present rise seems somehow more satisfying on the chart. It’s rising steadily, rather than ricocheting around with major swings. The problem with finding a bottom is that it’s only visible in hindsight, after the chart has gone on long enough to prove that it existed at some point in the past.
But a number of crop market analysts have become optimistic in the last couple of weeks, and this recent rally may be proof that they’re right that the bottom has been reached, or the rally may be the product of this growing optimism and may end if something spoils the mood.
For now there’s hope that the lows might be in, and the winter beginning to offer its usual gently rising market.
