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There is a strong case for betting on agricultural commodities, given the long-term outlook. The long-term bullish case is driven by the fact that global population will keep on rising and as standard-of-living in developing countries improve, consumption of agricultural commodities increase. But that is the long-term outlook. In the past three years, agricultural commodities have struggled as the chart for iPath Bloomberg Grains Total Return Sub-Index ETN ($JJG) below shows.

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As the chart shows, JJG has seen a sharp pullback since late 2012 and one of the main reasons for this pullback is concerns over a slowdown in China. This year though JJG has gained more than 10%. However, the ETF now faces stiff resistance at around $34. The question is whether JJG will see a breakout. Technical indicators do not suggest so as the chart below shows. The MACD has just crossed below the signal line, which indicates a pullback is likely.

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What about the fundamentals then? The near-term fundamentals for agricultural commodities are not very promising either.