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Advisor

Poll: How bullish for 2011?

"The year 2010 has been a very good year for commodity market bulls," says Jim Wyckoff, technical analyst in Dow Jones story this morning.  "Gold, feeder cattle and cotton futures all hit all-time record highs in 2010. Silver and sugar futures hit 30-year highs... and many other markets are at two-year highs."

The Continuous Commodity Index, a "basket" of 17 major raw commodity futures prices, shows a "strong two-year-old uptrend on the weekly chart, and is expected to trade sideways to higher in the coming weeks, or longer," Wyckoff says.

 

This technical measure suggests the "raw commodity market bulls will enjoy more success in 2011. Look for the raw commodity sector leaders to be gold and crude oil," he writes.

 

Any thoughts on price direction of the ag commodities in year ahead?

 

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7 Replies
Senior Contributor

Re: Poll: How bullish for 2011?

John, I voted Neutral because I'd like to wait until the next report comes out.  One rationale suggests a continued uptrend in demand and prices, and that could be significant especially if 2011 weather turns drier than normal.  The other rationale suggests we may see evidence of resistance at these price levels, thanks to the lackluster economy and potential troubles in China and elsewhere.  We all shudder to think what our world would look like if China's real estate market would deflate and leave a lot of bodies in its wake. 

 

Or rather than seeing resistance, perhaps we will see a continuation of very favorable weather which will push the trend lines upwards and reassure the markets that we have enough grain to go around.  What are the odds that we will continue along that scenario?  When was the last major dry spell in the "I" States?  The '80's?  The corn belt may be overdue for a dry spell.  Before long, someone's gonna say "we've entered a new era and we'll never go back to what has happened."  Uh, huh....

 

That said, I'm still waiting for the report before stepping up with something to move this off center. 

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Veteran Advisor

Re: Poll: How bullish for 2011?

I also voted neutral.

My experience says when everyone is bullish then the top is in.

So after voting I was rewarded to see the big % that are bullish.

Tine will tel and a dry spell could change the whole situation.

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Senior Advisor

Re: Poll: How bullish for 2011?

I'm not voting because I sold a couple of months back. My monsterous checks coming January 4th will look like a pittance compared to what these other guys will get.

 

A good thing is my rents will not go up and my fertilizer is bought and paid for. I like renting from myself as I don't have a disgruntled landlord or machinery payments or repair bills.

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Veteran Contributor

Re: Poll: How bullish for 2011?

Bearish: Corn ( say $1.40 lower cash ), Gold ( $350 lower ), Crude Oil ( 30% lower ).

Bullish most everything else: Protiens ( all higher ie., meats, milk, cheese etc., including protien based grains ie., wheat, beans, other oil crops etc.

Bullish ALL the equities everywhere ( some much moreso than others ), favorites are mid / small caps with International sales, BRIC types / foreign emergents, Mexico / Brazil and of course the DAX, etc..

Bound to be wrong, so ya'll got next week to position, thus FADE the afore. LOL.
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Veteran Contributor

Re: Poll: How bullish for 2011?

Hi John....Like some others have posted I voted neutral. However, everything feels so bullish right now and nothing you read is bearish, situations like this in the past have almost always been the top or at least the beginning of a pretty big correction. All it is going to take is a "moderate" correction in the Chinese economy and raw commodities will have so much dead weight to them. It virtually has been the Chinese buying that has been the rocket boosters even though some say it's all weather. They have been the big soybean and DDG buyers. Yesterday the Chinese central bank raised interest rates .25% and although that isn't that much it may take just one more trigger to get the slow down that the Government wants there. The size of their economy is uncomprehensible to us and "if" the snowball gets going it could be deadly. I also agree that if weather deals another blow to S.A. or U.S. farmers then we will probably see something similar to 2008, unless the Chinese correction trumps it. I say "be VERY careful". These prices are too good to let slip by.

 

Kevin

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Senior Advisor

Re: Poll: How bullish for 2011?

Don't forget the chinese tendency to cancel orders.

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Senior Contributor

Re: Poll: How bullish for 2011?

China may cancel specific orders, but they don't stop importing.

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