08/19/24 Afternoon CommStock Report – The Charts Look Awful

While the two presidential candidates’ debate who is responsible for inflation, the US Ag economy is now in recession because of deflation. The decline in many commodity prices has accelerated and has yet to show signs of a climax to losses. Corn, cotton and soybean prices are all well below the cost of production by substantial negative margins. In the case of soybeans, it is fortuitous that we have a crop insurance quarantined price of 11.66 bushel. As it stands today it would appear that the size of the revenue indemnity for insured soybeans will set an all-time record this fall. It is possible that producers will still receive a crop insurance indemnity because of low prices despite having good yields. The first thing that the market has to do in order to bottom is stop going down. We have yet to see definitive signs of a selling exhaustion. That could come in the form of a high-volume key reversal where bulls capitulate and bears cover shorts. Another signal of exhaustion on charts could be downside chart gaps where selling is so intense that price action leaves holes on charts to be later filled. The bad news is that the…