Hot Commodities: Cocoa Futures Soaring

Cocoa, one of the most popular soft commodities, has been surging to start off 2012 after a rough end to last year. From their high point in March, cocoa futures endured a drop of more than 41% through the end of 2011. But this year is already looking up, with futures up approximately 7.6% through the first half of January. In fact, the only commodity to turn in a better performance over the two week period was orange juice. The big story for cocoa last year came from the Ivory Coast which suffered through a civil war that put significant pressures on the production from the world’s most significant cocoa nation. But this year seems to be a different story, and the start of a trend that may help traders rake in some healthy gains [see also Ultimate Guide To Cocoa Investing].

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Commodity Trading Trends: Natural Gas Futures Down 15% This Year

2012 has only had a handful of trading days, but that has been plenty of time for natural gas prices to plummet. So far this year, NG futures have tanked by nearly 15% in just 11 total trading days. With futures sinking to end 2011, many speculated that prices would see some relief with cooler temperatures hitting across the U.S., but it seems that the weather has yet to let up. Though many areas have gotten their fair share of cold days, the constant fluctuation between cold and relatively warm temperatures has only steepened NG’s decline. Yesterday saw the price of gas dip below $2.5, levels not seen for well over five years [see also 25 Ways To Invest In Natural Gas].

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The 5 Minute Guide To Gasoline ETFs

In 1859, the first oil well was dug by Edwin Drake. Drake distilled the petroleum to make kerosene for lighting, discarding the other byproducts. More than 20 years later, with the invention of the automobile, gasoline was recognized as a valuable source of fuel. By 1920, more than 9 million gas-powered vehicles were on the road [for more gasoline news and analysis subscribe to our free newsletter].

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Commodity ETP Spotlight: DJP In Focus

Just a few short years after the introduction of the first exchange-traded commodity product, there are several dozens of options available for investors interested in accessing this asset class. Interest in commodities has surged as this corner of the market has demonstrated the potential to deliver impressive returns and meaningful diversification benefits [see also Three Commodity Plays For 2012]. Today we profile the Dow Jones-UBS Commodity Index Total Return ETN (DJP), a product from Barclays iPath that has amassed nearly $2.6 billion in assets under management since launching in mid-2006.

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Iran Tensions And Crude Oil: What It Means For Your Portfolio

Crude oil is arguably the most widely-traded commodity on the market and it is also one of the most significant. Much of the past year saw crude sway violently back in forth much like general equities, but oil prices have recently been enjoying a nice upward momentum that began in early October. With prices now broken through the triple digit barrier once again, investors look to the price drivers for crude to see if the commodity is overvalued or if now may be a good time to buy in. Perhaps the most important factor to consider in trading crude today is the tensions and issues revolving around Iran [see also 12 High-Yielding Commodities For 2012].

Posted in Brent Oil, Energy, Exclusive, WTI | Tagged , , , , | 12 Comments

This Week In Commodities: January 13th Edition

Commodities have started the year off on the right foot after earnings from aluminum giant Alcoa pointed to a more bullish outlook for the foreseeable future. After 2011′s tough year in which 16 of the major 22 commodities lost ground, it has been a welcome start to 2012. While a number of commodity prices seem to be at cheap buying opportunities, many are fearful that further issues overseas will create headwinds for their favorite investments. Gold and oil have been two of the most talked about assets, as issues in the euro zone and Iran have been creating problems for each respective commodity. To help investors better understand today’s commodity field, we outline three of the best commodity stories from around the web this past week [see also 2011′s Best Performing Commodity Was……Milk?]:

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Lessons Learned From Gold in 2011

Commodities made headlines throughout most of last year, but for all of the wrong reasons. 2011 saw a number of commodity investments turn sour with just six of the 22 major commodities posting annual gains. No commodity was more talked about than gold, however, as the precious metal took investors on a wild ride. After finishing 2010 with gains of approximately 29.5%, investors had caught gold fever and piled into the safe haven commodity. But the following year would be filled with both joy and frustration as gold was all over the board in 2011 [see also Three Reasons Why Gold Is Overvalued].

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Commodity Trading Trends: Is 2012 Silver’s Year?

Silver has been one of the most talked about commodities over the past few years thanks to its massive price swings. After a dismal 2008, silver prices soared for the next two years including an approximate 80% appreciation in 2010 alone. Then came 2011, which brought silver back down to earth despite impressive spikes intra-year. With losses piling up to more than 10% in the previous year, investors were quick to sell out of the flailing precious metal. It’s poor performance, however, came as a major surprise especially considering that gold was up by about the same margin that silver surrendered. But now that 2012 is underway, silver may be poised for another break-out year [see also 25 Ways To Invest In Silver].

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Commodity ETP Spotlight: SBV In Focus

Exchange-traded products have become the preferred instrument for many investors looking to add core, as well as tactical, commodities exposure to their portfolios. The “toolbox” continues to expand as investors have more than 130 commodity ETPs to choose from, with some allowing for targeted exposure to a specific resource, while many instruments offer broad-based access. One of the newest commodity-basket ETNs on the market is the iPath Pure Beta S&P GSCI-Weighted ETN (SBV), which has accumulated a little over $5 million since its launch in mid-2011 [also see 12 High-Yielding Commodities For 2012]. SBV is similar to other broad commodity ETPs in many ways, however, its product structure, portfolio composition, and one-of-a-kind weighting methodology results in a unique risk/return profile that may attract some investors, while potentially turning away others.

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2011′s Best Performing Commodity Was……Milk?

Commodity investing has been a difficult space to navigate over the past year. Though this asset class is known for its volatility, the last year has been plagued with unprecedented market instability, making commodity trading an incredibly frustrating venture. It is estimated that as many as 90% to 95% of investors lose money in the commodity space and last year’s returns likely only inflated that figure. That being said, there are still incredibly lucrative opportunities that exist. Gold, for example, finished up approximately 10% on the year though it was up much higher when its prices were sitting around $1,900/oz. Other notable wins included brent oil and live cattle while cotton and natural gas were among the worst performers. But what may be the most surprising to investors, is which commodity outperformed them all; milk [see also How To Lose Money Investing In Commodities].

Posted in Agriculture, Exclusive | Tagged | 4 Comments