We wrote in the November 20th edition that we were watching grains to try finding a place to buy some. There have been some new developments so it is now time to try. Prices have been generally depressed, from an already low level, by the ongoing trade spat between the US and China. Too much has been written on this for us to be able to add much but the G20 meeting last weekend provide some optimism that tensions would (at least) diminish. Stocks also rallied of course but then fell back but some grains held the rally pretty well. This has pushed soya meal up from compressions, as shown in the first chart below and the subsequent slight dip has found support at the level of those compressions, as is normal. That is a good ‘buy signal’.
Corn had fallen away from other compressions too (second chart) but the recent rally gas pushed prices (just) back up above those compressed levels. This too is a ‘buy signal’ but we would prefer to see Corn close a bit above those crucial levels of 383 in the March ’19 contract before ‘pulling the trigger’.
If Corn and Soya are to be bought, then maybe the others are too – don’t wait too long to jump in, especially if you have your own reasons from other analysis. Cotton also looks promising for similar reason to those in Soya meal.
This is an attempt – let’s try it and see how far it gets us. Don’t risk much on each such attempt as there may be several false starts before a move of any magnitude develops.
All signals courtesy of software supplied by our friends at Parallax Financial Research www.pfr.com
