Commodities may offer last best chance to jump on bandwagon

April 21, 2014 06:01 AM

Agricultural commodities continue their dramatic outperformance of U.S. stocks as predicted in my 2013 year-end report. This outperformance should continue and intensify throughout the year.

The bull market in agricultural commodities has a long way to go before running out of gas and may in fact accelerate later in the year if a typical adverse El Nino weather pattern asserts itself.Coffee(NYBOT:KCK14) and orange juice(NYBOT:OJK14) are perhaps the strongest commodities to date with evolving bull markets already underway. Coffee continues to offer a life changing bull market move beyond what has already been seen.

In the grains, wheat(CBOT:WK14) and rice have extremely precariously tight fundamentals and could easily be triggered into a scarcity trade on any imagined or realized production problems. However, corn(CBOT:CK14) and soybean(CBOT:SK14) fundamentals remain bearish.

Outside of shorting U.S. stocks, shorting the livestock commodities is likely one of the best bearish of the decade as bubbles are nearing completion in cattle(CME:LCM14), hogs(CME:LHM14) and dairy.

However, if there was ever going to be a correction in the nescient commodity bull market now would be the time as we are testing major overhead resistance (see chart below). Failure to correct here would intensify the trajectory of this bull market.

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About the Author

Shawn Hackett, commodity broker and author of the Hackett Money Flow Report newsletter (, is a nationally recognized agricultural commodity expert with more than 18 years of money management experience.