The Most Important Chart in Agriculture

I just got a call today from a very well-known, prominent individual.

 

He is looking for a perspective on the rally in Canola and Wheat, as it seems contrary to conventional seasonal wisdom. 

 

You know my thoughts on seasonals.

 

But you know I don’t worry too much about the whys and the how comes.

 

Instead, I focus solely on price.

 

It is not as noisy.

 

But admittedly not as interesting.

 

I love a good story and, quite frankly, the charts don’t do that for every one.

 

The Canola story is simple in my opinion.

 

Oil

 

All about the price of oil.

 

It appears like $100 is in the works again.

 

Wheat a little more complicated.

 

Black Sea this.

 

Drought that.

 

But I think a structural change is underway in the grain and oilseed market.

 

Let me explain:

 

The market moves in a cycle.

 

One with four stages.

 

Stage 1: Accumulation

 

Stage 2: Markup

 

Stage 3: Distribution

 

Stage 4: Decline.

 

 

If you learn one thing from our relationship.

 

Let it be this.

 

This is sooooo important.

 

The chart below represents a Corn + Soybeans + Wheat index of sorts.

 

 

The chart suggests we entered a Stage 2: Markup back in February.

 

Just as we did in September 2021, which I wrote about in the Klarenbach Report in early September 2021.

 

Now, don’t expect this chart to continue the parabolic move of late.

 

There will be some pullbacks.

 

But

 

By Jingles, it looks good for Ag.

 

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Trent Klarenbach, BSA AgEc, PAg, publishes the Klarenbach Grain Report,  Klarenbach Special Crops Report, The Daily Board and The Daily Kernel newsletters.                                                                                                                                                                                                                                                                                                                                                                                                   

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