Bespoke Investment Blog
has an interesting chart showing the performance of some major commodity groups over the last year. Take a look at the chart below and try to tell me, Mr Chairman, inflation is running at 3-4%. Obviously our friend,
wheat, has shown a ridiculous jump (thanks to corn overplanting the year before). As I've written recently,
soybeans are starting to come on ...[
Powershares DB Agriculture Fund Hits $40 for First Time - Soybeans Now a Shortage] Now, if my theory plays out, soybeans and wheat will get a transfer of acreage in the coming season and we'll have shortages of other things... corn had a quiet year at "only" 23% - with even more dollars thrown its way in the latest budget to produce even more ethanol perhaps we'll see it have another huge surge next year.
Here is what analysts predict will be happening next year; I'd love to see what they were predicting a year ago - somehow I doubt anyone predicted 100% gain in wheat, or 72% in soybeans. Again, at some point this must stop, and the rate of increase can *not* continue, but I still expect a solid trend up as both Fed induced speculators move in and plainly, supply and demand of this world is stressed on world crops. We'll check back in a year to see how the analysts did ;)
Long Powershares DB Agriculture Fund in fund and personal account
