A BIG REVERSAL FOR THE “AG” COMPLEX
A classic “boom and bust” sector is breaking out of a long bustâ€¦
DBA is a “one click” way to own a basket of agricultural commodities like cattle, coffee, corn, wheat, soybeans, and sugar.
Prices for these products depend on a variety of “slow” seasonal factors, ranging from the weather to how much seed farmers plant.
As you can see in the chart below, DBA saw a big boom in late 2010 and early 2011.
Elevated prices caused farmers to plant bigger cropsâ€¦ And that led to a long bust through the rest of 2011 and most of 2012.
But hot, dry weather in the U.S. and Russia is driving up grain prices.
And DBA has seen a major reversal.
The fund is up 13% in a month. If 2010 is a guide, this new trend could turn into a rally that lasts for months.
â€“ Larsen Kusick
Source: Market Notes