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Market Notes: Investors Nibbling On Soft Commodities -- September 25

|Includes:NIB, SGG, Teucrium Wheat Fund (WEAT)

Things are looking up for some of the agricultural commodity etfs (aka "soft" commodities). This entire group has been badly beaten down for the most part but some may be in the throes of a turnaround. One of today's biggest gainers was the Wheat etf (WEAT, $16.70) which jumped over 1.8%. This may not sound like much but this is a pretty big move in the soft commodity space. Although this etf has shed 38% in the past year, today's move does not necessarily mean the drop is over. A break above $17 resistance, however, would lend credence that the worst is behind it.

Another big upside mover today was the Sugar etf (SGG, $61.83) which gained 1.7%. The stock has been basing for the past four months and today it was able to hurdle $61.50 resistance on twice normal volume. This is a bullish move and likely represents the beginning of a rally in this commodity. (FYI: There are options but they are thinly traded.)

While it appears that investors are developing a craving for sugar, they are losing their taste for chocolate. Last week a topping tail was spotted in the Cocoa etf (NIB, $34.17) marking the top of a two month rally. Since then, the stock has fallen by roughly 4% and is closing in on major support at $34. A break beneath this level would put further pressure on the stock, likely forcing a drop to the $32 support level.

Stocks: WEAT, SGG, NIB