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OPINION

Snap, crackle, and pop

Snap, crackle, and pop
February 4, 2016
Snap, crackle, and pop

In the UK sales of the breakfast favourite dropped by 2 per cent last year, some blaming it on the fashion to eat 'on-the-go' (think paper coffee cups and patisseries), others pointing the blame at millennials' faddish food faves. The latest unisex choice, bircher muesli, preferably made overnight by celeb chef Jamie Oliver, sprinkled with chia seeds, natural vanilla extract (organic, of course) and splashed liberally with almond or coconut milk (the price of a litre of which is up 50 per cent in two years). Meanwhile, UK dairy farmers are crying into their spilt milk.

So has this affected wholesale markets? We look at the price of their futures contracts, which are most actively traded in Chicago. Kicking off with corn, it's trading at less than half of 2012's record high (843¢ per bushel). Bumping along the bottom at about 365¢ last year, the very recent attempt at a short squeeze failed miserably against the combination of secular resistance at 390¢ and Fibonacci 38 per cent resistance at 395¢. Expect it to hold below here for another three to six months, before another attempt at a rally occurs.

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