Motley Fool UK Article

Four Ways To Profit From a Soft Commodity Bull Market:
http://www.fool.co.uk/news/investing/investing-strategy/2007/07/17/four-ways-to-profit-from-a-soft-commodity-bull-mar.aspx

WSJ Article - Feeding Billions, One Grain at a Time

From the front page article in this weekend's Wall Street Journal:

"Dan Basse, president of AgResource Co., a Chicago research firm, estimates that as many as 55 million to 70 million acres of additional arable land may need to come on line globally over the next three to four years just to sustain current agricultural stocks -- already at very low levels.

Many of the pressures facing rice have been building in other agricultural products as well, especially in Asia. After years of healthy gains in production, farmers are also now facing constraints in their ability to increase yields on wheat, barley, palm oil and other crops."

...

"At the same time, demand for some agricultural commodities is expanding at its fastest pace in decades as new markets open up for grains to make ethanol and other types of alternative energy. That has sent grain prices soaring. It also has increased the price of foods that aren't used for alternative fuel, including rice, because farmers are dedicating more land to alternative-energy crops. The amount of land dedicated to rice has fallen to less than 380 million acres from 385 million acres in 1999 and many economists believe it will decline further."

Full article can be read at www.wsj.com (subscription required).

Bottom line? We don't have enough grain to feed everyone, and the ethanol/biodiesel push is exacerbating this issue. Stocks are at record lows, and demand is outpacing supply.

Weekly Positions Update - 7/29/07

Date	Position	Qty	Month/Yr	Contract	Strike	Call/Put	Entry Price	Last Price	Profit/Loss	Market Value
01/22/07	Long	1	DEC 08	Cotton			63.00	70.65	$3,825.00
04/16/07	Long	1	DEC 08	Cotton			64.50	70.65	$3,075.00
07/27/07	Long	1	DEC 07	Coffee 'C'			115.30	116.55	$468.75
06/19/07	Long	1	DEC 07	Coffee 'C'			120.50	116.55	($1,481.25)
12/05/06	Long	1	DEC 07	Coffee 'C'			135.25	116.55	($7,012.50)
03/23/07	Long	1	SEP 08	KC Wheat			502	581	$3,950.00
11/03/06	Long	1	MAY 11	Natural Gas			6.450	7.3890	$9,390.00
03/29/07	Long	1	NOV 09	Soybeans			828	876 1/2	$2,425.00
08/11/06	Long	1	MAR 08	Sugar #11			14.50	10.28	($4,726.40)
06/04/07	Long	2	JUL 08	Sugar #11			10.05	10.43	$851.20
10/18/06	Long	1	JUL 08	Sugar #11			12.08	10.43	($1,848.00)
03/20/07	Long	1	JUL 08	Wheat			488	582 3/4	$4,737.50
03/21/07	Long	1	JUL 08	Wheat			493	582 3/4	$4,487.50
Net Profit/Loss On Open Positions:									$18,141.80

Current Cash Balance $28,506.51 Open Trade Equity $18,141.80 Total Equity $46,648.31 Long Option Value $0.00 Short Option Value $0.00 Net Liquidating Value $46,648.31 Cashed out: $5,000.00 Total value: $51,648.31

Wheat Hits a Record High

From Agora Financial's 5 Minute Update:

Wheat surged to $6.64 a bushel yesterday, a record high price. And the U.S. Department of Agriculture reported the highest U.S. wheat exporting week since 1996.

“No shock here,” our Maniac Trader Kevin Kerr commented this morning. “Demand in China is skyrocketing, ethanol is pulling more potential ‘food’ out of the market, global harvests were already somewhat lukewarm this year.”

And the wheat fungus we told you about earlier this week “will get worse,” says Kevin. “As this latest fungus damage takes hold, prices will continue to climb. The wheat market is destined for much higher highs.”

www.agorafinancial.com

Trade Alert - Bought Coffee

Just couldn't help myself - bought another coffee contract this morning. Placed the order yesterday with a limit of 116.00

BUY 1 DECEMBER 2007 COFFEE 'C' 116.00 LIMIT
BOUGHT 1 DECEMBER 2007 COFFEE 'C' AT 115.30 (07/27/07 05:59:56AM)

In celebration, I just picked up a cup of Organic French Roast and am sipping it now!

The Economist's dollar food-index

"Led by soaring grain prices, The Economist's dollar food-index has risen to its highest level for more than a decade. Wheat prices are at an 11-year high, and stocks are forecast to fall to a 30-year low by June 2008, despite a recovery in Australia's harvest."

Read the full article: http://www.economist.com/markets/indicators/displaystory.cfm?story_id=9412071&CFID=8960712&CFTOKEN=66230367

"The coffee market is extremely underpriced right now," remarked Kevin Kerr - Agora Financial (www.agorafinancial.com). "Look for coffee, cocca and sugar to climb."

Maybe it's time to pickup another coffee contract...

Cotton Update

Good old cotton's been making a small run up over the last couple of months or so. Here's the latest news today:
http://www.fxstreet.com/futures/news/article.aspx?StoryId=d2121659-b681-441d-bf3e-936c1a2b681f

Looks like the funds are starting to get into this trade. I'm bullish on cotton because it is one of the only grains that has not been part of this massive run up. Farmers have been planting less cotton this year in favor of corn - and less acreage is always a good thing for long investors.

We're back

And stronger than ever!

It's been awhile since the last post - I freaked out when my account started to tank soon after I started this blog. But now I'm back testing the financial gods again.

Won't dwell on the past too much, but the account had dipped all the way down to $7K and I had received a margin call. So moving forward, I'm trying not to leverage up too much - trying to stay in the game. This bull market has another 10 years to run - and you gotta be in it to win it.

I also took out $5K and placed it in a Savings account - to my surprise, the check actually showed up from my sketchy account merchant.

New format to the blog:
* Will post current positions and value each week
* I'm going to discuss each position and the reasoning behind it in upcoming posts
* I'll try to link more to commodity news in the market - it's tough to find, so I'd like to begin to aggregate everything here for all to see

Date	Position	Qty	Month/Yr	Contract	Strike	Call/Put	Entry Price	Last Price	Profit/Loss	Market Value
01/22/07	Long	1	DEC 08	Cotton			63.00	69.80	$3,400.00
04/16/07	Long	1	DEC 08	Cotton			64.50	69.80	$2,650.00
06/19/07	Long	1	DEC 07	Coffee 'C'			120.50	117.35	($1,181.25)
12/05/06	Long	1	DEC 07	Coffee 'C'			135.25	117.35	($6,712.50)
03/23/07	Long	1	SEP 08	KC Wheat			502	564	$3,100.00
11/03/06	Long	1	MAY 11	Natural Gas			6.450	7.3060	$8,560.00
03/29/07	Long	1	NOV 09	Soybeans			828	895	$3,350.00
08/11/06	Long	1	MAR 08	Sugar #11			14.50	10.72	($4,233.60)
06/04/07	Long	2	JUL 08	Sugar #11			10.05	10.80	$1,680.00
10/18/06	Long	1	JUL 08	Sugar #11			12.08	10.80	($1,433.60)
03/20/07	Long	1	JUL 08	Wheat			488	563 3/4	$3,787.50
03/21/07	Long	1	JUL 08	Wheat			493	563 3/4	$3,537.50
Net Profit/Loss On Open Positions:									$16,504.05

Current Cash Balance	$28,523.82
Open Trade Equity	$16,504.05
Total Equity	$45,027.87
Long Option Value	$0.00
Short Option Value	$0.00
Net Liquidating Value	$45,027.87

Cashed out: $5,000.00
Total value: $50,027.87