In case you haven’t noticed, several commodities have swung to a bullish mode now, particularly RBOB gasoline, the soybean complex and corn. Less well-developed are the trends in the petroleum complex, softs such as coffee, sugar and orange juice, feeder cattle and wheat.
What’s been good for commodities has been better still for commodity producers, at least as measured by their stock prices.
Monday saw new highs scored in the MOO/GCC price ratio. The Market Vectors Agribusiness ETF (NYSE: MOO) tracks nearly four dozen producers of agricultural (ag) chemicals and equipment and livestock that make up the DAXglobal Agribusiness Index. The GreenHaven Continuous Commodity Index ETF (NYSE: GCC) is an ag-heavy fund mimicking the current iteration of the Commodity Research Bureau Index.
A rising ratio indicates the relative strength of commodity stocks versus commodities themselves. Equities signaled a turning point two months ago and, with a resurgent stock market, have been steadily grinding upward ever since.