From the desk of Steven Strazza @Sstrazza and Ian Culley @Ianculley

Commodities continue to churn as they digest recent gains. This has been a recurring theme over the past several weeks.

However, there are signs that this might be changing.

For instance, Lumber pushes to new all-time highs, Steel futures hit new highs, and Platinum is back above a key level of resistance.

Pockets of renewed strength have started to pop up across various groupings within the Commodities space. That's valuable information.

Consider Rebar Futures forcefully breaking out of a 3-year consolidation while most of the market chops sideways.

Both Lumber and Rebar futures hitting new highs screams global growth.  Strength from these markets bodes well for other procyclical areas such as...

From the desk of Steven Strazza @Sstrazza and Ian Culley @Ianculley

Many of the same themes that we came across in last week's Commodity Report continue to play out.

Overhead supply keeps demand at bay while price churns sideways, offering mixed signals.

Like many areas of the market, Commodities are a bit messy.

While sideways price action and choppy market conditions are the norms at the moment, there is one consolidation in the Commodity space that demands our close attention.

As JC pointed out in last night's Monthly Strategy Session, one of the most important charts right now is the Copper/Gold ratio as its intermarket implications span far and wide.

As the...

From the desk of Steve Strazza @Sstrazza and Ian Culley @IanCulley

Similar to last week, many areas of the Commodity space continue to chop sideways below overhead supply.

Healthy digestion of recent gains makes total sense given the explosive moves since last summer and in many cases is much needed.

Given that sideways price action is the main theme across Commodities at the moment, one particular consolidation stood out this past week.

And that consolidation is in the Corn market.

Corn futures have ripped off of their March-2020 lows, taking out key multi-year highs along the way.

Earlier this year it broke above a key Fibonacci level and its 2014 highs, and is now taking a breather in the form of a potential 8-week Flag or Pennant formation. These types of consolidations often resolve in the direction of the underlying...

From the desk of Steve Strazza @Sstrazza and Ian Culley @IanCulley

Overall, Commodities came under pressure this past week.

We noticed many markets running into resistance at former highs, and this was most prevalent in the Energy sector, with the exception of Ethanol.

Other areas of the Commodity space like Grains and Softs also showed short-term weakness. However, there were still some bright spots as usual.

Two of the markets that really stood out were Lean Hogs and Palladium.

First up, Lean Hogs broke out of a 6.5-year base, clearing its pivotal 2019 highs.

You know when Livestock futures are breaking out of half-decade long bases that Commodities are most likely in a bull market.

I believe the saying goes, "the bigger the base the higher in space."

If that's going to be at all true then we want to be buying Hogs above 98 with a target of 133.

Palladium also registered a nice move this week as this long-term leader in the Precious Metals space broke out of a 12-...

From the desk of Steve Strazza @Sstrazza and Ian Culley @IanCulley

In this week’s Commodity Report, we saw a continuance of many of the same themes that we've been pounding the table on for months now.

Mainly, strength in the procyclical areas of the market like Energy and Base Metals. This fits with what we’re seeing in Equity Markets as the rotation out of Mega-cap growth and into more cyclical sectors takes hold.

However, Crude Oil and Copper aren’t the only Commodities catching a bid right now. We’re also seeing strength in the grain markets. 

One of the charts that caught our attention this week was Palm Oil Futures.

Palm Oil is one of the most important Commodities in Asia and combined with Soybean Oil it accounts for roughly 63% of the global production of vegetable oils. Its uses vary from cooking and producing processed foods to personal care products like soaps and fragrances. It also plays a key role as feedstock for biofuel production.

While it's important to understand what we're...

From the desk of Steve Strazza @Sstrazza and Ian Culley @IanCulley

When reviewing our chartbook this week, one major theme that stood out is the relentless bid we continue to see in Crude Oil.

Most risk-on commodities have consolidated or pulled back recently as the dollar has rebounded back to its highest level in over three months.

But, not oil...

Crude has completely ignored this action from the US Dollar and tacked on an additional 12% gain since DXY bottomed about two weeks ago.

Ever since trading at negative prices last spring, Crude has been on an absolute tear.

Price just broke above its key prior highs and closed the week at its highest level since 2018. As long as Crude is above this key former resistance around 65 the bias is higher and we're targeting the 2018 highs just above 75 over the near-term.

If and when price takes this level out, we think Crude Oil heads back toward 100.

That's right. The next stop after 75 would be the 2011-2014 highs in the low...