Jerry Welch, Commodity Insite!
Call me at 406 -682 -5010
Ennis, Montana 59729
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Most commodity markets did so well on Friday, that the CRB Index jumped 136 points with the Goldman Sachs index picking up 333 points. Both indexes were sharply lower on Thursday but both nearly recouped it all on Friday. And the close for the Goldman index was a new, 6 month high while the CRB came with a few points of doing the very same thing.
Stocks as measured by the Dow Jones also did well on Friday. The Dow Jones gained 275 points and is within a striking distance of a new, all time high. Without exaggeration, the close on the final day of the week for commodities per se coupled with stocks was the most bullish end to a week that I can recall in months.
And bond futures, that fear and destest inflation, were down 26 points lends legitimacy to the strength seen with stocks and commodities. The message about Friday was clear. Pick with care the markets you are selling short in the days ahead. Pick with care.
Moving forward if the US dollar can work lower the stage is being set for even higher values for commodities. History shows there is a near perfect, inverse relationship between the dollar and commodities. When one market goes up, the other goes down. And on Friday, the dollar fell to a 3 week low before catching a modest bid.
Why so much strength with stocks and commodities on Friday, you ask? The night before, data came from China showing their economy in far better shape that most imagined. Since China is the 2nd most important economy on the globe, stocks and commodities responded to the data, respected the data by posting a solid and impressive week ending rally.
The first chapter in, Haunted By Markets is entitled, "Grocer To The World " that I penned on January 1, 1990. The final paragraph to that chapter can aptly be applied to the US agriculture markets moving forward. Here is what I wrote way back then:
"Farmers and ranchers are about to enter the most exciting and prosperous decade in history for agricultural America. There will, of course, be pitfalls and problems, there always are. But the problems encountered will pale in comparison to the bountiful times that appear to be just beyond the horizon."
If you are interested in the history of the futures markets from 1990 to 2015 go to commodityinsite.com and check out Haunted By Markets.
Below are the opening paragraphs to, "Grocer To The World";
"The final decade of the 20th Century will spawn unprecedented and tumultuous price swings for grains, livestock, fiber and tropical commodities. The soon-to-be-booming agricultural markets will be sparked by a force that has only until recently played any role whatsoever in determining prices. That force is demand worldwide in scope and on a level never before experienced."
Sound far fetched and unbelievable? Not really, because for the first time in history, the entire world wants what the United States already has. The world wants a standard of living comparable to that of the average American household."
The solid close on Friday, yesterday, with stocks and commodities hints loudly that a trade deal with China is on the cusp of being signed. If so, the U.S. is about to become the, grocery store to China. Sound far fetched and unbelievable? Not really because it is about to take place.
Don't be left behind. Learn the history of markets. Get the most reliable information you can. And drop me a line at email@example.com if you wish to see my twice a day newsletter. Or, call me at 406 682 5010.
American farmers and ranchers are about to become the, grocery store to China. A consequence will be a sea change for American agricultural and all for the better. All for the better.
The time is 10:13 a.m Chicago, April 13, 2019
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