How Klarenbach Research readers beat the market
Durum Case Study
Grain farmers and traders encounter a wide range of news and opinions on commodity prices. Because of personal biases, they may favor information that matches existing beliefs, sometimes overlooking contrary data.
In 2022, the optimism surrounding Durum wheat prices led many farmers to retain their stock, while grain companies maintained long positions.
Amidst widespread optimism and information overload, we took a different approach. By focusing on price charts, we sidestepped subjective views. These charts hinted at a potential price drop.
On January 15, 2022, our Durum Wheat Alert adjusted the Sell Signal below $19.60, so we warned our readers about a looming price trend shift.
Following our approach, readers acted on the Sell Signal and were ready for the market shift. In two weeks, Durum wheat prices fell by $1.40 per bushel.
Our readers benefited by selling before this price drop. Moreover, they secured prices at $2.60 per bushel above the crop’s yearly average.
This case study highlights how grain farmers and traders benefit from a clear, data-focused strategy.
By using objective price charts and avoiding distractions, our subscribers make smarter choices.
Being a subscriber means having an edge in unpredictable markets like Durum wheat.
“Trent, we are glad we took your advice and did not sell our Canola.”
In mid-February 2024, the nearby Canola Futures contract had dropped below 600 and traded at 580. Andy, a grower in eastern Alberta near the Saskatchewan border, called Trent for his opinion on the Canola. At the time, several analysts and advisors were recommending selling physical Canola.
In previous newsletters, we had identified both the 600 and 580 levels as key levels of interest, anticipating both to act as magnets for the price and areas of potential support.
While the price made a new closing low at 577, our Sentiment turned Neutral, while many others increased their bearishness.
Why did we become Neutral while others were bearish?
Our interpretation of the price chart suggested the 580 level could bring in buyers and act as support. Our analysis proved to be correct, and the price began reversing the upside during the first week of March and has continued until the time of publication at the end of August.
As of May 24, 2024 the price is trading at 670, adding $90/tonne to Andy’s 680 tonne inventory for a value of $61,200.
“Thoughts on selling old and new crop CWRS?”
May 16, 2024: New subscriber J.H. asked for our opinion on selling old and new crop CWRS.
Our Klarenbach SK Price Index was trading at $8.92/bu.
We looked at our Price Index charts and replied that old and new crop wheat were setting up for a move higher.
The Index Price pulled back for another day before breaking above the resistance level.
As of May 27, 2024 is trading at 9.32/bu, adding 40 cents/bu to unsold inventory.
