Photo: Le Xav’ via Flickr
You might have to wait a while before we hit “Breadloaf 36,000.”The great agricultural or soft commodity boom is already showing signs of fading.
Yesterday we mentioned how onion prices in India had plunged.
Soybean prices are dropping after China decided to cancel a major order.
Palm oil futures have been falling.
Today it’s the cotton crash. Momentum buyers who bought into the BAL ETN are simply getting flensed.
There’s been a mistaken belief that the floor underneath these agricultural commodities was Bernanke’s money printing, but as we’ve been arguing, weather and other supply disruptions have played a major role, as well.
As that stuff reverts to the mean, it’s easy to imagine the floor coming out from under prices.