The purpose of this post is to set the stage for the specific recommendations I am outlining on the Opportunity tab for upcoming marketing recommendations. Opportunities will be upon us shortly to make some significant grain sales to finish up 2012 and make a big dent in 2013 sales.
Let me first re-trace some developments that have set the stage for this opportunity.
1. Corn began its rally out of its intermediate and yearly cycle low. Big money follows these cycles, as traders move money from over-valued assets (stocks) into undervalued assets (commodities). That in a nutshell is what creates the cycles. If you have not seen the stock market lately, it has been on a tremendous climb since November 15, but it seems to have leveled off this week while commodities are beginning to take off. The three month charts below show tremendous gains in stocks since the November 15 low, but not so much in commodities. In the last week, commodities are up nearly 3 percent! It is simply a transfer of money from overvalued assets to undervalued assets.
2. Another driver into this situation is the plunge of the dollar. The scary tying is that we are still a week away before the dollar is due to reach the bottom of its daily cycle (the shaded area on the chart below). The current dollar cycle peaked on day 5 which means it is left translated cycle and the intermediate cycle peaked on week 2, so it is also left translated as described on the terminology page. As funds leave the dollar, they will pour into other asset classes and right now, commodities look more enticing than stocks. The dollar could bottom early, but still, we are looking at a failed daily and intermediate cycle. This is a big event that can move other assets. .
3. When you combine this with the fact that corn is rallying out of its yearly and intermediate low (as outlined on the previous post), and that volume on the grains have been incredible, I am reasonably sure this will be the fuel for the fire to push grain prices higher. I have outlined targets to make sales on the opportunities page.