The continuing plunge in commodity prices has brought corn, soybeans, and now, even wheat, close to limit down today. So far, however, no deal! If they don't reach limit down, then the likelihood increases that prices will rebound higher instead.There is also what I call the "Friday Phenomenon". This phenomenon sees many traders, including me, liquidate their positions because they aren't willing to risk the potential of a reversal over a weekend, when so many variables could change (like weather, war, political unrest, etc.).
One characteristic of physical commodities that provides protection that stocks don't offer is that commodities will never reach zero, whereas stocks may become worthless. Commodities will always have value, and they will eventually reach a floor. Commodities will find a bottom and will therefore rebound at some point. Stocks may reach worthlessness, as the companies they represent may go into bankruptcy and become entirely worthless.
