Over the past few months, leading grain prices have climbed up the commodity wall like a "mile-a-minute" kudzu vine. From late June to early August, the big three grain markets (wheat, corn, and soybeans) soared 40%-plus in a coordinated rally to multi-year highs before leveling off.
The question on the minds of market participants is simple: Is the grains' uptrend set to end?
The biggest story from last week, and one which I am monitoring very closely, is the rise of interest rates in the US. The Ten year treasury bond yield which stood at 3.16% a month ago has moved to 3.83% on Friday.
Corn, soybeans & wheat prices all popped at the end of last week. Will wet weather and delayed plantings keep prices rising, or is this rally unsustainable?
Of course I cannot know for sure if this is the bottom in commodities, and or the top in stocks, but I'm comfortable taking a stand here. As I often discuss, almost all asset classes are linked. For the past couple years, the JPY (yen) and the $CRB have been reliable indicators...
