On the Rise: Finally Some Movement..

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The news is all bullish today -- provided you own commodities.

After a two-day pullback, prices of most raw materials are soaring again. Anyone who’s short in these markets (betting on lower prices) is getting murdered, and that’s just adding to the upward pressure as the shorts buy to close out their wrong-way bets.

The Reuters/CRB index of 19 major commodities was up 2.6% to a record 443.81 at about noon PDT. The index’s year-to-date gain: 23.7%.

Contrast that with the 8.5% year-to-date loss in the Standard & Poor’s 500 index, and it’s easy to see why many stock investors feel more and more like they’re on the wrong train. Stocks are being hammered again today.

Speculators keep getting the blame for the commodity-price juggernaut, but once again, they’re getting plenty of support from the fundamentals.

Today, the government said U.S. oil inventories fell by 4.6 million barrels last week, to 302 million. Inventories have dropped for four straight weeks.

My Times colleague Elizabeth Douglass reports here that oil refiners have ‘opted to use up existing supplies instead of buying new barrels amid the crude market’s biggest bull run ever.’

In any case, ‘You basically have not seen the rebound in inventories that is typical for this time of year,’ said Stephen Platt, a commodities analyst at Archer Financial Services in Chicago. Not surprisingly, lower supplies on hand just stoke the bullish case for prices down the road.

Crude oil futures are up nearly $6 a barrel today, to just over $137, knocking on the door of the record close of $138.54 on Friday.

‘There were a lot of people who were short, thinking that crude would break,’ Platt said. That bet has been a disaster.

Meanwhile, in the Farm Belt, fields are underwater from torrential rains. That is driving corn futures prices to another record today, up 30 cents, or 4.5%, to $7.03 a bushel. Corn has rocketed 54% year to date.

The government on Tuesday estimated that U.S. corn production would drop 10% this year from last year because of flooded fields across the Midwest.

Wheat and soybean prices also are surging today. As are nickel, sugar and cotton prices.

Within the CRB index, just coffee and orange juice are down in the session.

So hopefully, you enjoyed your breakfast today -- as long as it was liquids only.