The supply seems to keep shrinking as each successive yield estimate comes in with a lower number. Once the market comes to grip with the actual supply number for this year, the focus will shift to the demand side of the equation and whether or not the market is doing its job of rationing supplies.
One thing is for certain - we, the consumer, are going to be reeling at the grocery store very soon.
Take a look at my Grain Composite Index - if you thought grain prices were high back at the peak of the commodity bubble in 2008, you ain't seen nuthin' yet! The Index is firmly above that level.
The strong day in the grains, combined with big moves in both gold and silver and another bullish call on oil from Goldman Sachs, has sent the CCI, the Continuous Commodity Index, through the top of its recent trading range. If the CCI does not surrender its gains before the end of the week and remains above that resistance level, from a technical analysis perspective, the trend in commodities will have shifted to UP.
Note how the top of this recent trading range has been in the same zone as the 61.8% Fibonacci retracement level. That makes today's move even more significant. I do not see much in the way of overhead resistance past this point until we get closer to 582 - 585 in this index.
Shifting a bit to the mining sector stocks - the HUI has pushed past 440 and is maintaining its gains as of this hour. It is on course to make a try at heavy resistance centered near 460. If the HUI closes a week above this level, it portends a trending move to the upside which would initially target 540 -555.
Silver has cleared heavy resistance at 29 and is closing in on the last level of chart resistance between it and a handle of "30". If it does that, look for the momentum funds to come piling into this market.
