A new report from Dennis Gartman at The Gartman Letter discusses the reaction that commodity prices have had to the the latest developments in Greece and China.
While global equity markets have reacted positively to the most recent indications that Europe could be continuing its kick the can down the road approach with Greece, most commodity markets have also been strong in the past 48 hours.
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The commodities world is watching for the details of Friday's World Agricultural Supply/Demand Report. Gartman noted that, unlike previous years where water shortage was an issue, this year it has been a surplus of rain that has concerned many corn, soybean and cotton investors. Gartman is currently bullish on cotton.
Gartman explains that he is bullish on gold in terms of the euro or the yen, he has no interest whatsoever in trading gold versus the U.S. dollar at the moment. He currently recommends ETFs that price gold in the Euro, such as the AdvisorShares Gartman Gold/Euro ETF (NYSE:GEUR), and ETFs that price gold in the yen, such as AdvisorShares Gartman Gold/Yen ETF (NYSE:GYEN).
Global crude oil prices are also responding favorably to developments in China and Greece in the past 48 hours.
Gartman mentioned the halting of Libyan exports as another key driver of oil prices.
A calming of the situation in Greece; a resolution to the collapsing stock market in China and a new problem in Libya has put a strong bid into the crude oil market, he explained.
The United States Oil Fund ETF (NYSE:USO) is up 1.6 percent since Wednesday's close after falling 14.0 percent in two weeks.
For now, Gartman remains on the sidelines in terms of oil, but he included a graph showing the decline in U.S. crude oil imports in recent years.
We are on the way to net exports in the not too distant future, Gartman concluded.
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