Equities began the week on firmer footing after tensions in the Middle East did not escalate over the weekend. Crude Oil retreated, easing immediate concerns about energy prices, while US stocks rallied on Monday. Markets held much of that ground on Tuesday as investors watched for signs of diplomatic progress during the UN General Assembly. Crude Oil fell below $95/bbl, although Gasoline held steadier and Copper continued to climb.
By Wednesday, the relief rally had lost momentum. Talks between the US and Iran appeared to have made little substantive progress, Crude Oil stabilized, and US futures gave back some of their earlier gains. Rising Treasury yields and a stronger US Dollar added pressure, while mixed preliminary PMI readings offered no clear signal on global growth. The immediate fear of escalation had eased, but the underlying uncertainty had not.
That uncertainty reaches beyond the Oil market. Energy is a significant cost in agricultural production and transportation, while fertilizer prices and shipping conditions can also affect the movement and cost of food commodities. These connections do not mean that every agricultural price will move in step with Crude Oil. They do, however, make agriculture an area worth watching as markets continue to assess the consequences of the conflict. SIA’s technical readings offer two views of that market: one across a broad agriculture fund and another focused specifically on grains.
Invesco DB Agriculture Fund (DBA)
The Invesco DB Agriculture Fund (DBA) offers a broad view of agricultural commodities through futures contracts tied to markets including corn, soybeans, wheat, cattle, and sugar. Rather than holding physical crops or agriculture companies, it reflects movements across this mix of futures markets. Its returns can also be affected by the cost or benefit of rolling contracts, income on collateral, and fund expenses, so they may differ from changes in spot commodity prices.
DBA currently holds an SIA SMAX score of 8 out of 10. Support is identified at $27.16 based on a 3-box reversal, with a further level near $24.60. On the upside, resistance stands at $31.20, followed by $33.77 and $37.29. Its most recent point-and-figure signal is a Double Top, adding to its positive technical picture. The fund has gained 0.78% over the past month, 7.13% over the quarter, and 10.17% over the past year. It outperformed the S&P 500 Index over the quarter, when the benchmark gained 3.91%, but trailed its monthly return of 1.18% and annual return of 16.00%.
SIA Grain Futures Equal Weight Index (EWI929)
The picture becomes more pronounced when the focus narrows to grains. The SIA Grain Futures Equal Weight Index (EWI929), which tracks corn, oats, rice, soybeans, wheat, canola, and barley, holds an SIA SMAX score of 10 out of 10. It has advanced strongly since the beginning of March and remains in a rising column of 11 Xs without a 3-box reversal. Its latest point-and-figure signal is a Spread Double Top.
Near-term support is identified at 19,369 based on a 3-box reversal, followed by 18,251 and 16,531. Resistance stands near 22,694, with a further level at its 2022 high of 28,217. The index has gained 4.05% over the past month, 18.28% over the quarter, and 36.24% year to date, compared with gains of 1.18%, 3.91%, and 13.43% for the S&P 500 Index over the same periods. While broad agriculture has shown strength, the grain index has stood out more clearly. Its relative strength is the signal to watch as the market weighs this week’s easing in energy prices against continuing geopolitical uncertainty.
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