Positive momentum spreads to corn and cattle
As mentioned in several updates in recent days, we are continuing to see momentum turn positive across the agriculture sector and today, corn and live cattle look set to join soybean, sugar and coffee. This leaves the question whether this eventually will spread to energy and metals, or whether this current correction still has more to go.
One of the major drivers of negative price action throughout February has been the stronger dollar. The speculative community bought the biggest amount of dollars for at least five years during the week ending February 26, which raises the risk that this was too much too fast. Some near-term dollar weakness therefore has the potential of stabilising frayed investor nerves, especially in gold and silver, which today is showing early signs of negative momentum slowing. We will have to wait until tomorrow for confirmation of this.