Deconstructing the DBC

After Tuesday's post on the DBA, I though it might be interesting to look at the DBC, which is more of a pure commodity play.
In recent days the food crisis situation has gotten legs as the feature story on the evening news and in the media everywhere. Rice shortage is currently the hot button as retail supplies dry up and commercial users scramble. Costco and Sam's now ration the amount of rice you can buy and some large buyers have lookouts posted outside the stores in order to alert them when shipments arrive.
Several articles have revealed that evil "speculators" are responsible for driving agriculture products off the scale, but, Hey!, speculation is what 90% of market activity is all about, especially in the futures markets, so I'm considering that news flash as non-tradeable.
The DBC, of course, is probably rife with the same speculators, but with the DBC you spread your greed to oil, fertilizers and gold and you still get wheat and corn.
Daily volume on the DBC is running about 750,000, though it has had 2.5M+ share days recently. DBA, by comparison, is recently running 2.5M daily.

Above is the DBC:DBA ratio chart indicating the current rise in DBC relative strength approaching Nov 07 values. Maybe a little arbitrage play as DBC gets lofty.

As an options play, DBC lacks open interest (less than half of DBA) and exchange participation is limited. Open interest at most strikes is less than 1000 and typical daily volume is zero in many of the strikes. Bid/Ask spreads are .15 -.20 and fills tend to be sloppy, so no daytrading or scalping going on here.

A MAY buy/write ATM (38) will currently yield 2.5%.

Given the thin open interest, the put/call ratio is essentially noise and can be assigned little importance.

Short interest has increased dramatically since February and reflects the same displayed by DBA. Some problems with Blogger prevent me from publishing the short interest chart.

The 3 linear regression study (30,11,3) suggests an emerging double top pattern that may morph into a "kiss the channel goodbye" situation. Petro products comprise 55% of the DBC net assets and with crude approaching 120 and gold approaching a cyclical low, my risk/reward assessment is that shorting is not a wise strategy at this point in time.