Take A Look At This…
Believe it or not, the end of the first quarter is nearly here. As a result, it’s the perfect time to recap the top commodity performers over the past three months.
Let’s get to it…
Coffee
The luscious bean blew away the competition with an eye-popping first quarter gain of 50%. Worrisome drought conditions in the prime coffee growing regions of Brazil had analysts cutting the country’s production forecasts 15-20% below last year. Not surprisingly, investors sent the commodity soaring because of it.
It’s truly amazing how a commodity that had such a bearish outlook a few months ago turned into the top performer of early 2014. Readers of flagship commodity ETF investing service, the Commodity ETF Alert, racked up gains of 45% in the iPath Pure Beta Coffee (CAFE).
Lean Hogs
Here’s the surprise gainer of the first quarter. Lean hogs put together a stunning rally of 46% thanks to surging demand and a virus outbreak. As you likely remember from a recent article, the PEDv virus has spread to 27 states. The nasty plague kills nearly 100% of infected piglets under 3 weeks old. What’s more, there’s no cure for the virus. Industry experts aren’t quite sure the extent of the damage on the US hog population. And that’s precisely why investors are sending prices so high.
Wheat
This essential grain got hot when Russia invaded Ukraine. The commodity rose 14.9% in the first quarter, with most of the gains coming in just the past month. Since the Ukraine is one of the top five wheat-exporting nations on earth, investors are worried the escalating political firestorm will hamper global supply.
And that’s not all…
Drought conditions are worsening in the Western US. As a result, investors are concerned the US winter wheat crop will come in below expectations. All these factors combined to make wheat the top-performing grain in the first quarter.
Oats
Here’s an often overlooked commodity that performed solidly in recent months. Oats gained 14.4% on the quarter thanks to a multi-month shipping backlog out of Canada. Some of the backlog has been alleviated in recent weeks, which brought oat prices back down to earth.
Corn
Similar to wheat, corn caught fire when Russian invaded Ukraine. The commodity rose 14.3% on the quarter and is now trading at $4.88 a bushel. With the spring planting season right around the corner, and the Ukraine crisis still muddying the waters, corn could add to recent gains in coming weeks.
As you can see, there were some stellar gains in commodities over the past few months…
The overall strong performance sent the CRB index up nearly 10% in the first quarter. That’s an impressive gain considering the S&P 500 is up a mere 0.5%, while the DOW is down 1.2%.
If you haven’t considered the profit potential of commodities yet, I urge you to do so.
We offer two ways you can potentially profit from fluctuations in commodity prices. First is through the Commodity ETF Alert mentioned earlier. The second is via the Option Profit Pipeline, where we use options to rack up gains in natural resource stocks and commodity ETFs.
Until Next Time,
Justin Bennett
Category: Commodity Trading
