The DB Agriculture fund tracks a proxy of actual soft and hard commodities and not the stocks which represent them. In this fund we’ll find weightings of cattle, corn, beans, meal, sugar, coffee, wheat and other grains that are a nice representation of goods. Trading in the individual names can be tricky and require some experience and expertise. However, an aggregate such as the DBA gives us a bigger picture view of trends and price action for the group as a whole.
We see how this ETF has made higher lows on its way up from the February 2016 bottom. No surprise these commodities were helped by stimulative monetary policies around the globe and a drop off in the dollar currency basket. Crossing the 200 ma was a big hurdle in April and now that moving average has turned up. The MACD is currently on a buy signal and though relative strength has been impressive we see this ready for some sideways action here.
That is fine, and turnover has been lower coming off the pennant. After a brief stall and holding the recent lows we should see DBA start moving higher again, perhaps toward the 30 level later on this year.
