Now Offering Free Email Alerts

Want to be alerted about specific investment coverage as it happens?

Send an email to:

Brett(at)CommodityBullMarket.com

with the type of investment alert you'd like to receive in the subject line of the email, and we'll add you to our email alert list.

Current email alert options:

• Marc Faber updates
• Jim Rogers updates
• Weekly futures review
  

Cocoa in Short Supply? Cocoa Futures on the Move

Just caught this informative piece on Seeking Alpha which makes a bullish case for cocoa futures, due to very tight supply.

What's driving cocoa prices higher? Supply, supply, supply.

Back in February of 2008, tight supplies were forecast in the cocoa market, along with higher prices. Analysts called for a 14% rise in cocoa prices in the U.S., which would have pushed prices up to $2,325/tonne.

They underestimated the move: Despite the broader pullback in financial markets, cocoa in NY was sitting at $2,626/tonne on Friday, December 26. If NY cocoa hangs tight, it could end the year some 30% up - an outstanding performance given the other pricing trends in commodities right now.

Music to my "long cocoa" ears.

Commodity Futures Review - January 4, 2009

Now for the weekly review of our commodity futures positions - current as of January 4, 2009.

First, our top blog posts from the past week:

• Expert Commodity Picks for 2009: Jim Rogers and Marc Faber
• GoldMoney Review: Gold Climbs for 8th Straight Year
• Jim Rogers on Kudlow: We're going to have an inflationary nightmare

Our coverage of Marc Faber's recent interview on CNBC from December 1st continues to see a lot of traffic.

A review of our trades and positions from the previous week:

• Continued to hold one cocoa futures contract - down on the week, mostly due to a sharp Friday drop.

• Continued to hold one mini-gold futures contract. Gold was stuck in the mud for the week - though it did wrap up an 8th consecutive up year vs. the US dollar.

• Continued to hold one wheat futures contract - up a bit for the week. Looking to add on further strength.

• Bought one corn futures contract. This was an attempt to "pyramid" our grains position and diversify - in hindsight, looking at the charts of each, wheat looks stronger, and we should have added to that position before initiating this one.

• Bought one cotton futures contract - we LOVE cotton at these prices - as we've discussed with before in this space.

Commodities that appear quite beaten down - but we don't own them...yet...

• Sugar
• Coffee
• Natural Gas
• Silver
• Crude Oil

Open positions

Date	Position	Qty	Month/Yr	Contract	Entry Price	Last Price	Profit/Loss
12/29/08	Long	1	MAR 09	Corn	422 1/4	410	($612.50)
12/15/08	Long	1	MAR 09	Cocoa	2586	2506	($800.00)
12/31/08	Long	1	MAR 09	Cotton	48.52	48.90	$190.00
12/24/08	Long	1	MAR 09	Wheat	579 1/4	610	$1,537.50
12/15/08	Long	1	FEB 09	Mini Gold	836.6	877.3	$1,351.24
Net Profit/Loss On Open Positions							$1,666.24

Account Balances

Current Cash Balance	$47,887.81
Open Trade Equity	$1,666.24
Total Equity	$49,554.05
Long Option Value	$0.00
Short Option Value	$0.00
Net Liquidating Value	$49,554.05

---------------------------------------------
Cashed out: $20,000.00
Total value: $69,554.05
Weekly return: -2.5% *** since 1/1/09
YTD return: -2.5%

2008 return: -8%

***"Cash out" mostly means taxes, but lately we've also been using it for living expenses, and also to finance a cool new time management software startup that is starting to lift off - and was recently covered by the Sacramento Business Journal.

Expert Commodity Picks for 2009: Jim Rogers and Marc Faber

What a crappy year 2008 was for commodities! Will they rebound in 2009? If you believe, as I do, that we are in the middle of a secular bull market for commodities, then current prices represent a tremendous buying opportunity.

Jim Rogers has been saying it best lately - that you want to buy assets where the fundamentals are unimpaired. And the only asset class where the fundamentals are currently unimpaired is commodities - in fact, the fundamental story for many commodities has even improved since the financial crisis took hold, as there is a lot of supply coming off the market.

Jim is also fond of referencing the performance of commodities during the Great Depression, where they were the first asset class to turn up because there was no supply.

Since I agree with Jim's point of view, I decided to research specific commodity picks experts are making for 2009. My "expert" criteria is highly biased, based on the two people I've been following the closest during this commodity bull run - Jim Rogers and Marc Faber - because of their prescient calls and knack for spotting commodity trends before the herd.


Jim Rogers

• Likes agriculture and says prices are down due to forced selling, not fundamentals, which have actually improved. "Farmers can't get loans for fertilizer now."
• Also loves oil - says it has been crushed - it's price is below the cost of production - he's been buying more, and believes it will roar back in a big way.
  

Marc Faber

• Says 2009 will be a "total disaster" for the global economy.
• Believes commodities have corrected within a bull market, and there are opportunities to be found there.
• Sees significant inflation coming as a result of the Fed's actions.
• He continues to like gold and gold miners - believes exploration companies are very depressed with respect to the price of physical gold.
  
• Oil at this level is becoming attractive, as are oil companies.
• Shares his specific picks at the 7:45 mark of this interview.
  

Editor's Note: This article was also published by Seeking Alpha.

Click on their respective names to read more Jim Rogers and Marc Faber coverage.

For more information on investing in gold miners, check out some of our recent coverage of gold and gold stocks. I personally subscribe to BIG GOLD, produced by Casey Research, which is an excellent service.

GoldMoney Review: Gold Climbs for 8th Straight Year

GoldMoney's James Turk reports that 2008 was the eighth year in a row that gold has climbed against the US dollar. Since 2001, when the streak began, gold has appreciated an average of 16.3% per year with respect to the US dollar.

Turk also lays out gold's performance against the major currencies, where, to my surprise, we see that gold has also been appreciating at a double-digit rate, on average, against the other major currencies over this time period.

Click over to the latest GoldMoney Review for the full chart and Turk's always insightful commentary.