Home Daily Analysis Charts / Trade Ideas Agro-commodities, Free Fall or Exhaustion?

Agro-commodities, Free Fall or Exhaustion?


This week the agro-commodities ETF DBA has dropped to 16.03, the lowest level since its creation in 2007. Is this bearish sequence a sign of more drops or will it find a bottom soon? In this post, we will discuss what to expect in agro-commodities.

DBA – New Record Lows

DBA is the largest agro ETF with a market value of $438,3MM, and an average traded volume of 364,157 in the last three months. Close to 65% of DBA’s basket includes Live Cattle, Sugar, Soybeans, Corn, and Cocoa.

Daily Range and Volume

In the daily chart, we observe that the last bearish internal cycle should end soon in the area between $16.01 and $15.81. Consider as a guidance that the price is falling and volume is below the average. This situation makes us suspect that the bear market is near to its end.

Live Cattle and a Potential False Breakdown

The Live Cattle (LC) weekly chart shows that a bearish cycle ended at 94.3 level when the price bounced in five waves. The corrective sequence looks like the transition between wave 2 to 3. The last retracement developed by LC could end between 110.875 and 103.400. Is likely that price would make a false breakdown and start to bounce in five waves. The potential long-term target is at 141.625; it is 100% of the Fibonacci Expansion.

Remember that the price is not forced to move as our outlook indicates. The charts delivered corresponds to the Elliott Wave Theory application.



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