Its All About The Dollar

As I have been writing now for months, the dollar is in a multi year cycle decline which will be a good thing for the grains.  Just today, the dollar appears to have reached its daily cycle peak, completing the right shoulder of what I think will be a head and shoulders top.  If that completes, the dollar should reach 96.  That is even lower than what I had suggested on my last post.

Corn

If corn had any concerns of a rising dollar, it has not shown it.  Corn held strong over the past couple weeks, and today pushed higher as the dollar finally showed some weakness.  If the dollar manages to reach 96, I am beginning to believe corn could go a further than the $4.09 number I have written about several times. 

Sentiment levels on corn have now reached the highest levels of optimism since late last June, but it currently stands only at 50%.  There is still a lot of room for corn to move higher.  I probably will recommend selling some $4.09 corn, but not as much as I was planning to a month ago.

Soybeans

Soybeans have also shown strength through the recent dollar strength.  Again, don't be laughing about $11.00 soybeans.  Beans closed at a new contract high today, and like corn the optix are only at 50%.

Crude Oil

Crude oil has now been stuck in a 6% consolidation range for 51 days. That is a typical length of time for a typical oil cycle.  Oil is in the timing band for a yearly cycle low, so I still expect a move into this low to be big.  Its just not happening as I planned.  I think the strength of the stock market has helped keep oil prices supported, despite recent buildups in inventories.