RE:RE:Winter cold(This market is highly manipulated. I am patiently waiting for the day that shorts are covered.)
We have begun to see signs that demand is beginning to show up in a plethora of diverse commodity markets whether that be from actual export statistics, bull futures spread action(nearby prices outperforming Deferreds), strengthening cash basis levels (cash prices outperforming futures prices) or from actually price index increases that suggests the US/global economy might be on the mend and some form of an economic rebound by consumer demand might change the bearish narrative on “no demand for commodities ever again for the rest of our lives” to the idea that extreme demand apathy might have bene overdone.
Speculators are up to their eyeballs short on this “no demand forever crowded trade”, and it may be time for an upside rebalancing of the commodity marketplace.
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The cotton market, a very cyclical Ag commodity, has just broken out to the upside on surprisingly strong export demand.
We feel cotton is just the beginning of a short covering onslaught by speculators that should allow producers an opportunity to make cash sales and protect downside price risks at more lucrative prices and to do so opportunistically instead of being reactionary on a bulge of emotional fear. We are bullish commodities heading into the Spring of 2024.