Agriculture And The Dollar Looking For Higher Ground

After a large run up in Q1 of this year Agriculture related commodities pulled back significantly. Its not uncommon for futures to take a dive after such a large run up. However, a few short months later agriculture commodities are at it again. Check out the chart of DBA:

Right side of this chart is quite compelling has buying interest has shown up in recent weeks. With talk increasing about inflation and what the FOMC will do to combat it will certainly bring attention, once again to agriculture related commodities.

Speaking of inflation and FOMC the dollar has been on a tear as of late. Ben Bernanke has recently been taking a stand regarding the stance the FOMC is taking. This certainly helps the dampen the fear that the market will continue to have an oversupply of dollars. The next stop for the dollar, a test of the 200dma. Check out the chart:

I have two more charts for your viewing pleasure:

Origin Agritech (SEED) is an interesting stock. If you believe in the global boom, then you must believe in the growth of the “new” middle class. This middle class will demand lots of goods and services. At the very basic level, cotton! SEED supplies Cotton seeds to India as well as other seeds in China. The two major hubs of growth.

MedAssets (MDAS) is another interesting stock. This is by far a stretch for me to post, however if it can prove its worth with some upside volume MDAS could prove to be a Monster Stock.

Enjoy the week!

No Positions: I would like to enter into SEED after it begins a run up of 20%+ or more with a well formed price consolidation.

Posted in Categories: Commodities, Contributor, External Research, Stocks, USA.

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