If you are looking for dynamic market action, you are not going to find it in the agricultural markets, says Jim Bower, with Bower Trading, “The commodity index is down at levels we have not seen for 6 to 8 months.” He added that much of the big speculative funds are in the stock market at the present time and not in commodities.
Bower states that it would not take much, either on the production side or the demand side, to generate some market action, “The funds are heavily short wheat and also short the corn market. While they have been long soybeans, they have reduced those positions significantly. There is fuel for a fire.” He urged producers and investors to keep a close watch on the news, especially the weather, “Weather is the one thing that can change the supply side very very quickly.”
Bower remains a fan of the sell and defend market strategy, “That involves selling the cash and defending it with some kind of strategy on paper including written options or bull spreads.”
For more information, contact Bower Trading at 800-533-8045 or www.bowertrading.com.
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