David Fuller's view Public uprisings which started in Tunisia before quickly spreading to Egypt and many other Arab countries, plus Iran, have been a catalyst for political change in some of these states and this people's revolution has yet to run its course.

Compared to these largely unpredicted, unprecedented and no doubt extremely significant political changes, it seems trite to say that they have suddenly become a catalyst for the unwinding of some very large commodity positions by speculators. However that is precisely what we are seeing today, not least in the grain and bean complex. People are unwinding some of their riskier positions in a temporary preference for cash.

If this helps to cap food price inflation - we will not know for several more months because global reserves are low and significantly improved harvests have yet to occur - it would come as a considerable relief for governments, not least in emerging countries.

The Commodity Futures Trading Commission (CFTC) would also feel under less pressure. This regulatory body has been in the 'hot seat' for several months and is under pressure to rein in traders, as you will see from Fullermoney's lead item and warning on 13th January. (Also, search our site under - CFTC - for additional comments on this subject over the last two months.)

The 'big four' in the grain and bean complex closed limit down today, so without those limits the declines would look even more dramatic: corn (weekly & daily), soybeans (weekly & daily), wheat (weekly & daily) and rough rice (weekly & daily). We have seen similar daily declines within the current upward trends but these are occurring from higher levels, at a time of greater reappraisal, and against the background of the CFTC's recommendations regarding speculation. Many related commodities have seen similar moves today, in spite of (or could it be because of?) today's report by the USDA that corn stocks have fallen to their lowest level since 1974.


Technically, we have seen peaks of at least near-term significance. New closing highs are now required to challenge this hypothesis which would look increasingly likely in the event of additional downside follow through tomorrow.

A number of other commodities have weakened sharply today, including palladium (weekly & daily) and platinum (weekly & daily). PA shows a large downside key day reversal. While PL had been ranging, it certainly shows the key characteristic in today's large downward dynamic. Interestingly, gold (weekly & daily) and silver (weekly & daily) were not similarly affected, reconfirming a pecking order among monetary metals.

Among today's losers, previously high-flying cotton (weekly & daily) was also limit down for the second consecutive day. However the world's most important commodity, crude oil (weekly & daily) remained firm on concern over Middle East unrest, include the prospect of civil war in Libya.

Fundamentally, I maintain that we are still within a commodity supercycle. Nevertheless, a secular trend is subject to many ebbs and flows. Commodities are also more likely to move in rotational swings, rather than all at once. This weekly chart of the Continuous Commodity Index (Old CRB) is due for a pause and reaction.