These contracts have been carving out bottoms, and they're starting to resolve higher from well-defined bases.
Now, we're seeing more of the same.
The short-term strength is hard to ignore.
Just take a look at the scoreboard 👇
Our Agricultural Performance Table shows the entire complex's short, intermediate, and long-term performance.
As you can see, Grains have been the short-term leaders, and the Softs have been the short-term laggards.
Several of the top contracts are up double digits over the last month.
Wheat contracts are catching a bid.
Soybean products continue to lead.
Even Cattle and Hogs are making moves.
It’s the first time in a long time we’re seeing broad-based participation in the Ag space.
That’s happening after years of underperformance.
Many of these contracts, like corn, Oats, Soybeans, and Wheat, are still down 30–50% from their 2022 peaks.
That kind of drawdown creates opportunity, especially when prices start reclaiming support and momentum starts turning.
Our Grain Index is bouncing off a key level of interest 🚀
Our Grain Index holds an equally-weighted basket of seven grain contracts, and it's breaking out of a multi-month consolidation.
The buyers showed up at around 330, which was resistance for the index from 2015 to 2020, and where the last major bull run began.
After a 50% drawdown, we've been anticipating the bull's return.
If the breakout holds, it sets the stage for a broader grain rally.
This broader grain rally would include Oat futures 📈
There’s an old line in the futures pits:
“Gentlemen don’t trade Oats.”
But we’re not here to be polite. We're here to make money!
Right now, the chart gives us every reason to pay attention.
After gaining 200% during the last bull market, Oat futures have spent the previous 3 years carving out a massive base.
They’re now pressing against a major downtrend line that has been serving as resistance.
This level coincides with the VWAP anchored to the 2023 peak.
If this resolves to the upside, we could see a powerful trend reversal in one of the most forgotten contracts in the Ag space.
We want to buy Oat futures on strength above 367, with a target of 493 over the coming 2-4 months. The VWAP anchored to the 2023 peak is our line in the sand.
Over longer timeframes, we're looking at 614 and 811 as potential levels of interest in the future.
Due to a U.S. Federal holiday this week, the COT report will be released on Monday, June 23.
Commodities Trade of the Week
This week, we’re highlighting the $3B specialty chemicals stock, Hawkins $HWKN.
The company provides various industrial and lab-grade chemicals to cities and businesses across the U.S.
Since bottoming in 2020, the stock has been in a secular uptrend, rallying nearly 1,000%.
It has been a leader in its industry.
After months of churning sideways, the price is coiled below a shelf of former highs. This sets the stage for a potential breakout to new all-time highs.
Here's how we're trading HWKN 👇
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