The commodity sector has been slammed by hedge fund long side liquidation over the last 5 weeks which has basically taken the complex on a one way ride down and down hard at that. It has now finally bounced as nervous shorts cover for fear of getting caught overstaying their welcome on that side of the market should the hedgies' algorithms flip over into the buy mode over the chatter over European and IMF plans to deal with Greece.
The bounce could take it as high as the zone delineated by the pair of blue lines drawn on the chart. Should it breach this area with some gusto, it should see a return of some speculative money that has been sitting on the sidelines into the commodity sector as a whole.
Interestingly enough, corn locked limit up today with a decent sized pool of orders. News out of Russia on a ban on certain exports send buyers scrambling into both wheat and corn as Russia has been providing a substantial amount of cheaper quality feed wheat. The idea that this source will now end caused significant short covering. Considering there is a major report out tomorrow morning from the USDA, it is going to be anything but boring if the numbers provide any unexpected surprises.
"When misguided public opinion honors what is despicable and despises what is honorable, punishes virtue and rewards vice, encourages what is harmful and discourages what is useful, applauds falsehood and smothers truth under indifference or insult, a nation turns its back on progress and can be restored only by the terrible lessons of catastrophe." … Frederic Bastiat
Evil talks about tolerance only when it’s weak. When it gains the upper hand, its vanity always requires the destruction of the good and the innocent, because the example of good and innocent lives is an ongoing witness against it. So it always has been. So it always will be. And America has no special immunity to becoming an enemy of its own founding beliefs about human freedom, human dignity, the limited power of the state, and the sovereignty of God. – Archbishop Chaput
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