Trades that reflect excessive bearishness in agricultural commodities

View from the Peak

There comes a time when positioning becomes so extreme and attitudes so bearish that it it becomes time to act, not just for a tactical trade but a structural realignment that better reflects balance sheets and punishes reckless sentiment. According to Paul Krake, that is where we are in agricultural commodities. Some of his recommendations include LONG a basket of soybeans, wheat and corn vs LONG US two-year notes; such prices will only continue in the event of a hard landing, which is hedged by the two year note position. Paul also recommends LONG wheat and SHORT cocoa as a purely financial trade, and LONG Nestle and SHORT General Mills and Kellogg.

- 23 February, 2024

Short Shots

Vermilion Research

Is a collection of technically vulnerable charts culled from the “Negatively Inflecting” and “Toppy” columns within Vermilion’s Weekly Compass report or from various technical screening processes. The charts contained in this report have developed concerning technical patterns that suggest further price deterioration is likely. For these reasons Short Shots can also be a great source of ideas for investors interested in short-selling candidates.

Charts highlighted include Corteva (see above), Enphase Energy, General Mills, Kraft Heinz, Hershey, MarketAxess, Moderna, Newmont, Penumbra, Roblox, SolarEdge and Valmont Industries.

- 18 August, 2023

Six companies at risk of inventory-related 1Q'22 misses

Behind the Numbers

The current macro environment is bringing to the forefront the importance of the different impacts that the various inventory accounting methods have on company results during times of inflation. BTN have noticed several companies whose inventory levels have declined which may have shielded them from the full impact of rising costs. Meanwhile, their revenues have benefitted from aggressive price hikes. They believe this may be setting the stage for earnings disappointments in 1Q and 2Q 2022. Companies highlighted General Mills, The Coca-Cola Co, The Hershey Co, Post Holdings, Ball Corp, and Mondelez International.

- 18 March, 2022