According to the recent TIM (Trade Ideas Monitor) report, the TIM Sentiment Index (TSI) decreased 0.3% week over week to 51.06, after decreasing 5.3% from 54.03 to 51.19 one week earlier (see last week's post, and previous post and the youDevise website for additional information on the TIM report). The TSI remained close to the neutral 50 value all week. Nonetheless, for the five trading days ending July 23rd, the number of new long ideas as a percentage of new ideas sent to investment managers did increase to 71.74% from 61.37% one week earlier. To date, longs represent 64.23% of ideas in July and 58.98% this year.

As for individual securities in the U.S. and North America, Phillips-Van Heusen (PVH), Darden Restaurants (DRI), and Potash (POT) were stocks recommended as longs by institutional brokers, while Qualcomm (QCOM), Perrigo (PRGO), and Williams-Sonoma (WSM) were recommended as shorts. The consumer discretionary, consumer staples, and energy sectors had long broker sentiment for the week, while information technology, health care, and utilities had short sentiment.

Video Source: Clip Syndicate Bloomberg
Rainfall has been over 3 times the normal amount in the Midwest the last few weeks, with more rain on the way. The heavy rains are affecting corn and soybean yields, with just 74% of corn emerged from the ground, and only 32% of soybeans emerged. Farmers are now at a point of needing to make a decision of whether to take the Government subsidized crop insurance and keep the ground idle, or plant and take the risks of lower yields, which could be potentially as low as 75% of normal yield levels. As much as 500,000 to 3 million acres may become idle. Analysts are already cutting corn crop yields by 4 bushels per acre. As ethanol production continues to increase, expect corn prices to rise, with consumers feeling the effects at both the pump and in the grocery store.

Companies to watch that may be impacted include Archer Daniels Midland (ADM) and Bugne (BG). Others that are likely to continue to benefit from rising demand for food commodities include fertilizer companies such as Mosaic (MOS), Potash (POT), and Agrium (AGU), chemical and seed companies such as Dow Chemical (DOW) and Monsanto (MON), and agricultural machinery makers such as Deere (DE). On the direct downside are the users of corn, especially the restaurants and food producers with lower margins and less pricing power, such as Darden (DRI) and Tyson Foods (TSN).