Agriculture soared 75% from the bottom in 2020. At the time no one was praising the low food prices. (Funny how that is.) Prices have not been particularly relative to historical levels. However, the rate of change (Speed) of the rise in agricultural commodities was rapid. This caused people to take notice and freak out as a result. Understandable in an overall inflationary environment with lagging real wages.
The chart today suggests that food inflation is now over. We have a double top M pattern in place with the most recent trend up breaking CRACKING!
Cracking does not mean it will go back to the lows. It could be if we hit a recession. Or it can pump up again if the dollar weakens further. (More dollars are needed to buy the same amount of commodities) No one knows the future, certainly not me. However, the chart pattern suggests the momentum of higher food prices is over for a while.
The chart today suggests that food inflation is now over. We have a double top M pattern in place with the most recent trend up breaking CRACKING!
Cracking does not mean it will go back to the lows. It could be if we hit a recession. Or it can pump up again if the dollar weakens further. (More dollars are needed to buy the same amount of commodities) No one knows the future, certainly not me. However, the chart pattern suggests the momentum of higher food prices is over for a while.
Real Macro Economic Investing
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