Optimism in agriculture
Agricultural prices continue to trend up, whether due to Chinese buying or supply constraints in Europe. Corn Optix's 5 dma is at 66, a level which in the past few years marked intermediate term tops in corn.
From 1991 - present, this led to below average returns over the next year:
And once again this consistently led to intermediate term tops in the past 5 years:
Soybeans Optix's 5 dma is at the highest level in almost a decade (79):
This led to worse than random returns for soybeans over the next year:
Looking more closely at the past 10 years, this was a consistently bearish sign for soybeans over the next few weeks and months:
Similarly, sugar Optix's 5 dma is at 71...
...a level which mostly led to losses for sugar over the next year:
And wheat Optix's 5 dma is at 68...
...which mostly led to losses for wheat over the next year:
Overall, sentiment in the agricultural commodities sector is extremely high. Outside of a rare few massive commodity runups, this is not a good sign for bulls over the next few weeks and months.