Energy commodities are holding up despite last week’s selling pressure.
No, I’m not talking about natural gas – that rope snapped months ago.
But the rest of the main players – crude oil, heating oil, and gasoline – rebounded heading into the weekend. And when I look at the charts, Friday’s strength might be the beginning of a more sustained advance for energy.
Check out the equal-weight energy index:
It’s finding support where I would expect – the prior-cycle highs from 2018 and a key retracement level off the 2020 low.
As promised, I’ll cover the wheat complex this week, rounding out our coverage of the grain markets.
Let’s dive in!
Before we start, check out this breakdown of the different types of wheat varieties. I love to nerd out on this stuff – anything that involves maps, I’m hooked!
Today I’ll cover the most actively traded US contracts; Chicago Soft Red Winter Wheat (SRW), Kansas City Hard Red Winter Wheat (HRW), and Minneapolis Hard Red Spring Wheat (HRS).
The first two contracts trade on the Chicago Board of Trade (CBOT), with soft red wheat first trading on the CBOT in 1877. Minneapolis spring wheat trades on the Minneapolis Grain Exchange (MGEX).
These different types of wheat derive their names from their growing regions, where they initially come to market, and even their protein levels (hard = higher protein, soft = lower protein).
Forget about what Powell said or whatever you heard on the street.
We’re still looking for risk assets to buy.
That includes stocks and commodities. Despite the dollar applying downside pressure to risk assets this morning, I want to share one commodity that looks ready to rip…
Check out the weekly chart of Cotton futures:
Cotton experienced a sharp decline last year following an impressive run-up off the 2020 lows. Fast forward to today, and it’s challenging a critical retracement level from below at approximately 89.
The bulls have hammered this level since October of last year. And the way I learned it…
The more times a level is tested, the higher the likelihood it breaks.