Beans, Beans, They're Good for Your Heart

Soybeans are busting up through a well-defined inverse bullish head and shoulders setup, highlighted on the commodity fund's daily chart, updated below.

On that note, soft commodities as a group are breaking higher via the DBA ETF this morning, having perfectly held a backtest of their own collective inverse head and shoulders neck-line. Coffee and corn appear to leading the surge here as well, with wheat stabilizing after a tough couple of weeks. 

Overall, while natural gas is deservedly receiving tons of international attention for all of the supply issues there relating to Europe and Russia, we ought not forget about the softs and the potential for supply issues into winter, too, given all of the droughts and lingering effects from the war in Ukraine, as well as other natural factors which would have affecting the crops regardless of Putin or China.

As for the market at-large, headed into Jackson Hole on Friday morning we have a mixed, flattish tape with crude oil gapping up back into the mid-$90s as energy stocks show some life. 

While new home sales came in rather soft this morning it is hard to see Powell going dovish with his rhetoric given the summer rally in financial assets coupled with oil's strong reversal of yesterday morning's weakness.