Eoin Treacy's view 2010 was a dismal year for global agriculture yields. 2011 has so far also been notable for extreme weather, particularly in the southern hemisphere. Stockpiles for a number of essential foods are at historic lows and prices have rallied impressively. Demand for ethanol and biodiesel, speculation and hoarding have all contributed to the higher price structure.

Over the last year, a large number of food commodities have broken long-term inflation adjusted downtrends. This suggests that while characteristically volatile and subject to weather events, most food commodity prices can be expected to sustain levels above their historical norms during corrective phases.

Cotton and Arabica coffee remain two of the most overextended soft commodities relative to their respective 200-day MAs. Corn and soybeans began a process of mean reversion in late February. Wheat, oats, rough rice, sunflower seeds, sugar, rapeseed, palm oil, rubber, cocoa and orange juice have all fallen to test areas of potential support at their 200-day MAs. Most of these commodities have experienced larger reactions than any seen in the course of the last year. This is enough to question the consistency of their respective medium-term uptrends. They will need to post and hold upward dynamics to check potential for an additional test of underlying trading.

While soft commodity prices have entered a corrective phase within an overall secular bull market environment, farmers will be keen to increase crop yields by any means possible. This suggests higher demand for farmer machinery and fertilisers.

The shares in this Performance Filter of fertiliser companies share a common chart pattern. They have all unwound overbought conditions relative to their respective 200-day MAs and appear to be in the process of finding support. Agrium is a case in point. Potash Corp of Saskatchewan has outperformed somewhat and has bounced from its MA. A sustained move below C$50 would be required to question potential for some additional upside.

The shares in this Performance Filter of agriculture equipment companies also share a common chart pattern. Deere & Co., Agco Corp and CNH Global have all posted progressions of higher reaction lows for more than two years. These would need to be broken to begin to question medium-term uptrend consistency. Mahindra & Mahindra is performing in line with the Indian market. Fiat Industrial has been ranging since its IPO a few months ago. Toro Co. while a lawnmower manufacturer and not directly related to agriculture has one of the more consistent uptrends.