This is an update of the Hackett Money Flow Commodity report.
In this report, I highlight the anomalous money flows that are giving important signals in Agricultural and financial markets. They include Treasury bonds and the implications for the major bear market in stocks for 2014; the triple money flow sell signal in cocoa and the implications for a major crash in prices; the triple money flow buy signal in cotton and the implications for an interim bottom and a rare commercially driven buying panic in class III milk.
The milk market specifically has entered a parabolic move that has been the basis of my major bullish forecast in milk that began in 2012. It was always my view that record high prices would be seen near the end of 2014. Given that this bull phase began three months later than originally anticipated the final bull market top may extend into early 2014.
Have no illusions here, we are in the ninth inning of the bull market in milk. Commercially driven buying panics have very short fuses and this one will be no different.
All the perma-bears that have been yelling at you all year long are now becoming bulls. They are likely to claim the following:
1) Despite record high prices demand destruction will not occur this time
2) Chinese demand for milk powder will never stop as far as the eye can see
3) Despite record high prices and dramatically lower feed prices, global production will remain constrained
4) Milk is moving to a permanent higher plateau…This time it is different
5) The technicals are now bullish etc.
Don’t listen as the bears did not see the rally coming and the bulls will not see the crash coming.
I have outlined in this report a specific tool to help time commercially driven bubble tops the likes we are likely now seeing in milk. I have gone over the cotton market and the MN Wheat market as examples of how this tool was very useful in timing those bubble tops and it should provide a great tool in timing the milk market as well.
Get ready for a record hedging opportunity in the next 1 to 3 months. This will not take long to end. Only if adverse weather surfaces can this bubble top in milk extend for a longer duration than this or go higher than my long term $25/hwt target. Put options will become a very important tool as a hedge against a possible weather snafu.
Click on link below for complete report
An investment in futures contracts is speculative, involves a high degree of risk and is suitable only for persons who can assume the risk of loss.