There comes a moment in every long, grinding bear market when the selling exhausts itself and nobody cares anymore. The last marginal seller has finally thrown in the towel.
And when an entire corner of the commodity market gets left for dead, that’s usually when something big is brewing.
Grains have been the punching bag of the commodity world for more than three years. While Cattle futures went parabolic during one of the strongest livestock bull markets in half a century, the feed markets got crushed by relentless supply and historic livestock strength.
But every boom ends, and eventually mean-reverts.
Today, the biggest Cattle surge in 50 years is finally rolling over. This has rejuvenated the entire grain complex.
This isn’t just Soybeans catching a bid. The entire grains complex looks poised to enter brand-new primary uptrends.
And if this is the beginning of a true regime shift, the upside isn’t measured in days or weeks.
It’s measured in years.
Let's talk about it.
After a brutal multi-year bear market, the Gold Rush Grains Index has stopped falling.
Our Gold Rush Grains Index is an equal-weight basket of Soybeans, Soybean Meal, Soybean Oil, Corn, Wheat, Rough Rice, Aats, and Canola.
As you can see, the price peaked in 2022 and then suffered a brutal 45% drawdown. It wiped everyone out, including many farmers.
But here’s what matters now...
The index bottomed last year and then successfully retested that low a few weeks ago, forming a clean double bottom pattern.
If the bears can't know 'em down, there's only one way to go: higher.
If this is a real inflection, grains are likely in the early innings of a multi-year advance. And after the beating they took over the past few years, the upside potential is enormous.
Do you remember that relationship we talked about earlier between livestock and grains? It's at a key level.
The Gold Rush Livestock Index holds an equal-weight basket of Live Cattle, Feeder Cattle, and Lean Hogs.
When you divide it by our Grains Index, you can see the primary trend has been relentlessly higher for years. As long as that ratio rises, grains stay on the back burner.
Earlier this year, the ratio violated a shelf of former highs and printed fresh all-time highs. However, this was an oopsie, and the market is correcting fast.
So long as the ratio holds below resistance, we want to favor grains over livestock for the foreseeable future.
With that in mind, we want to look for the best risk/reward opportunities in the grain markets. Right now, Oat Futures are near the top of our list.
Oat Futures are scooping-n-scoring.
Oat futures recently broke below a major shelf of former lows that had held for years. The bears had their chance, but they failed miserably.
When a market breaks support, attracts a wave of short sellers, and then immediately rips back above that level, those shorts are now trapped. Their pain becomes fuel. And the initial mean-reversion move often accelerates into something much bigger.
As the legendary Brian Shannon says, "From failed moves come fast moves in the opposite direction." We believe Oat futures are set up to make a big move.
We want to own Oat futures above 300, with a target of 390 over the coming 3-6 months. Over longer timeframes, we're looking at a secondary objective of 522.
Last week, we highlighted a marine shipper that's focused on transporting energy products. This week, we're going back to the well and outlining another marine shipping stock.
The difference? This name focuses on transporting dry bulk products such as grains. It stands to benefit mightily from rising grain prices.
Premium members can see the entry and target levels below. 👇
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