Agriculture - Seasonality
Aggiornato
Brief for Agriculture:
- Price inflation of commodities and tailwinds of seasonality will provide a bountiful harvest this year's end for agricultural commodities.
Focus points:
Coffee:
Oats:
Soybean:
Soymeal:
Cotton:
Most interested in Coffee and Oats, as they are showing strong trends entering into the bullish season, but eagerly awaiting Soybean and Soymeal reversals for a most opportune entry.
GLHF
- DPT
- Price inflation of commodities and tailwinds of seasonality will provide a bountiful harvest this year's end for agricultural commodities.
Focus points:
Coffee:
Oats:
Soybean:
Soymeal:
Cotton:
Most interested in Coffee and Oats, as they are showing strong trends entering into the bullish season, but eagerly awaiting Soybean and Soymeal reversals for a most opportune entry.
GLHF
- DPT
Nota
Oats quietly performing, up 1.70 a bushel since this post.Corn and Cotton may be about to have an ungodly breakout, with the blessings of seasonality:
Wheat should be looked at later in November:
The reasoning behind this trade is that while Natural Gas may or may not have concluded its rally, Ammonia + fertilizer prices are skyrocketing with a lag, Natural gas is the major component of production costs:
Potash (no Potash indicator on TV other than a company which trails it):
Furthermore, below normal monthly average streamflow indicate droughts in western NA, exacerbated by La Nina which is occurring. While most harvests are complete, these are speculative headwinds.
Corn is receiving a double whammy, as energy costs drive up ethanol:
Nota
Coffee:Corn, definitely keep a watch:
Soybean and products breaking out as per prediction:
Soybean:
Soybean Oil:
Soymeal:
Very rarely do you get a "for sure" trade like what just happened due to lagging effect factors in economic machines. Natural gas is on the decline now though so watch ammonia + fertilizer prices to follow, but there should be momentum yet to take advantage of.
You can monetize through ETFS, options on the futures, or calendar spreads as the single leg futures contracts can have a large margin requirement.
Nota
Here is the big convex trade other than soybean. If equity bullish case is true, cannabis stocks will enjoy tailwinds of both gamma traders + fundamentals due to fertilizer. Else low risk premium:Nota
Oil -> Ethanol -> Corn relationship:
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