EVENT RISK FOR MARKETS - CAVEAT EMPTOR

Global equity markets these days seem to be totally unaffected by all the geopolitical turmoil and natural disasters of the last few months.

Once again the ever cautious David Rosenberg chips in with words of wisdom, alerting investors to the many risks that the market is currently ignoring. (Note to readers - David Rosenberg's Newsletter ends its free trial period this month, so this will be the last of his charts on this blog)

THE SOFT COMMODITY BOOM CONTINUES

Some call it the Bernanke effect, some blame the BRIC nations, while others blame rising soft commodity prices on the weakening USD.

JIM ROGERS clearly has been spot on as far as the boom in soft commodities goes. Food inflation is making headlines again!

Clearly some of the commodities may be rather overpriced at the moment. Meanwhile speculators and commodity hedge funds continue to build positions in this rather overbought sector. Caveat emptor - Watch this space!

Source : Commodity Prices / Quotes & Commodity Charts - Free - A fantastic site for commodity charts.

RISING FOOD PRICES

Rising food prices continue to fuel inflation fears the world over. Flooding due to rain in the US midwest and a weaker US Dollar are driving prices higher
http://www.reuters.com/article/ousiv/idUST29090620080609
http://www.bloomberg.com/apps/news?pid=20601087&sid=aRT0a6qnmxwg&refer=home
While Corn prices are at record highs, Wheat prices pulled back sharply from their recent highs, as Wheat production is expected to increase this season.
'''''Food Price driven Inflation'''''' is going to be a serious challenge for many governments and Central Banks in an election year (read: Elections in the US & India)
WHEAT
CORN
SOYBEAN

TIME TO EXIT SOFT COMMODITIES (Food Grains)

With everyone piling into soft commodities, I think we have hit a short term top in the food grain market.
While demand for food grains far exceeds supply, the vertical rise in price of these food grains warrants caution. Speculation is high, and everyone is desperate to join this party.

At these levels, a sudden sharp pull back, is likely to cause panic selling, a triggering of stop losses and losses for short term speculators.
Even in a long, multi year bull market in these commodities, be prepared for corrections, which can be used for fresh entry points.

For now, if you can't stand the heat, then stay out of the kitchen.

Corn:Wheat:Soybean: