After energy metals, agricultural products are quietly taking the lead in a new round of commodity market trends.

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After energy and metals led the rally in commodity markets, agricultural products are now ushering in a new round of upward trend.

With recent increased volatility in US stocks, funds are seeking allocation directions outside the technology sector, and the technical patterns of agricultural commodities have signaled a breakout. Fundstrat's head of technical strategy, Mark Newton, is optimistic about the performance of grains, predicting that corn, wheat, and soybeans will continue their upward trend into 2026.

He said that from a technical standpoint, the rally in agricultural products is starting within the commodities sector, at a time when the upward momentum of US stocks has begun to falter in recent weeks. He expects that although oil prices may stagnate or reverse in the coming weeks, some commodities still have room to rise, and "soft commodities" are likely to become the next sector to catch up, following the recent strong returns of metals and energy.

Supply-side risks are providing fundamental support for the rise in agricultural products. Energy expert Anas Alhajji pointed out that 33% of global traded fertilizer comes from the Gulf region, and the planting seasons in Asia and Europe have already begun. He warned that even if tensions in the Middle East ease within a few weeks, their impact on consumer prices will persist for several months. “If the fertilizer issue turns into a food crisis, the consequences will be much more profound.”

Agricultural Product ETFs Break Through Key Resistance Levels

Newton continues to track the Bloomberg Commodity Index, which has an energy weighting of 34% and an agricultural weighting of 27%. He pointed out that the index has surpassed last month's high, reaching the highest level since 2022, and may challenge historical highs within the year.

For specific products, Newton focuses on the Invesco DB Agriculture Fund (DBA), which tracks futures contracts of 10 agricultural commodities. According to FactSet data, DBA has a three-year annualized return of 13%, a ten-year return of 4%, and has risen more than 3% in the past year.

Newton stated that DBA has broken through a key technical resistance level. The fund broke above its trend line at the beginning of February, and shares traded on Thursday reached the highest volume in recent years, further confirming the validity of last month's breakout. He expects DBA to test last year's high of $28.49, and possibly move further upwards to $32, a target that could be reached by 2026.

Newton believes that based on the six-year cycle pattern in the grain market, soybeans, corn, and wheat have all entered an upward trajectory. Looking at this year's performance, the rally in grain futures is evident: wheat futures have risen 17% so far this year, soybeans are up 13%, and corn is up 3%. He said that as investors seek allocation options beyond tech stocks, agricultural commodities are gradually entering the market spotlight.

Risk DisclaimerThe market involves risks, investment requires caution. This article does not constitute personal investment advice, nor does it take into account the specific investment objectives, financial circumstances, or needs of individual users. Users should consider whether any opinions, views, or conclusions in this article are suitable for their particular situation. Investments made on this basis are at your own risk. ```