I recently presented the chart above to a local group of farmers.
We have drawn two trendlines forming a Falling Wedge Pattern.
At the time, the price was above the blue Anchored Volume-Weighted Average Price (AVWAP) and testing the upper trendline.
I suggested a break above the upper trendline could begin a trend reversal. This was not a prediction but creating awareness.
However, since then, the price has dropped below the blue AVWAP and has been unable to get back above it.
I don’t spend much time on the Commitment of Traders Report, but let’s look. (credit to S.N. for suggesting I spend time reviewing the COT)
The red line represents Commerical Specs while the green represents Large Specs.
In December, they were trading at extremes not seen since 2017.
Since then, the Specs have been unwinding their net positions, with the Commercial Spec net position making new lows and the Large Specs making new highs.
Can the COT Report help with market timing?
We don’t think so; however, it foreshadows future price action.
The challenge is when.
In the meantime, we await confirmation of a trend reversal in the price.
Trent Klarenbach, BSA AgEc, publishes the Klarenbach Grain Report and the Klarenbach Special Crops Report.
Klarenbach Research
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On the date of publication, Trent Klarenbach did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
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