January 4, 2017
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The previous post about 2016 asset performance showed how wheat was once again a poor performer. Wheat is, or is one of, the biggest components of agricultural market indexes/ETFs, like RJA. It has been the biggest laggard among the main components. Agriculture in general has been a big laggard. Is it a good bet to believe once again wheat will be near the bottom of the list? Agriculture at this point is viewed with apathy. There is very little interest in it. Even within commodities there is interest in energy, base metals, and PMs, but little in agriculture. Besides uranium, there is little comparable in apathy. And of course, the related shares such as the bigger companies like POT or MOS, are way off their 2008 highs. Shorter term both POT and MOS have been trading in these ranges for the last 12 months, and they have been seeing signs of strength appear. CF is another big fertilizer stock. SOIL is an ETF holding fertilizer companies. I am very bullish on agriculture, but have been repeating all thru 2016 to be patient about them, and to use the selling waves to buy. This year should be a much better year for agriculture. There are equities of all sizes in the agriculture sector. The ones listed are some of the bigger ones. But there are lots of smaller companies to be researched also.
The 1/6/16 post, stated agriculture would likely bottom by March, and I used RJA to begin to invest in ags back in the Spring. Inflation and commodities had major secular lows in 2016. My belief about the PMs has been December of 2015 was the secular low. And mid-late November 2016, leaking into December, would be a re-test of those lows, but at a much higher price – a secondary test, and then the first solid rally. But there would be more retesting in this first quarter. It’s great to see some miners with relative strength, but I needed to see gold itself lead the way first. And the $ plays a part in this. Before the $ has another push higher, it really needs to have a reaction. There is alot of belief in the $ now. Where in the world have those people been for the last several years? Now they’ve decided to get bullish? Our President-elect (whom I voted for) seems to have some magical powers apparently. In major bottoming/topping processes the correlations between markets gets skewed.
I am not going to be investing in any individual agricultural commodities, only in a basket product like RJA. There are others, but they’re kind of weird frankly. But some of the individual equities are quite interesting. And if you’d like to follow some of the individual components of RJA, there are many ETFs out there now. The ETF symbols for some are WEAT, JO, SSG, BAL, CORN, and SOYB. I have no positions in any of them.
Trader Scott has been involved with markets for over twenty years. Initially he was an individual floor trader and member of the Midwest Stock Exchange, which then led to a much better opportunity at the Chicago Board Options Exchange. By his early 30’s, he had become very successful in markets, but a health situation caused him to back away from the grind of being a full time floor trader. During this time away from markets, Scott was completely focused on educating himself about true overall health and natural healing which remains a passion to this day. Scott returned to markets over fifteen years ago where he continues as an independent trader.