DJ AIG Grains TR Sub-Idx (JJG)

Cake Dex test run

At the time of this writing, the grain commodities underlying this fund are forecast to be in record supply. Worldwide and particularly U.S, Corn and wheat are anticipated to have bumper crops in 2009 with soybeans being in slightly lower supply. Growing conditions are ideal. Since crops were planted later than usual, untimely rain or any frost in prime growing areas could lower yield estimates. Regardless, given the extraordinary projected supply of these grains, prices are quite low. Given the continuing growth in world population, changing weather patterns worldwide and the fact that you can't eat copper or gold, this is an ideal vehicle for making a bet that the bumper crops of today have pushed grain prices to unsustainable lows over the long term. JJG appears to me to be a great intermediate to long term investment.

I love playing the commodities right now. Its the next boom. Think oil in 2008 but now transfer those expolive gains over to other commodities such as agriculture, gas, and metals. ETFs are not as sexy as individual stocks but its hard to miss with the ETF. This is truly investing for dummies and if buy low sell high ever applied, this would be the time.

stagflation

I'm following AllStarPortfolio and JakilaTheHun into this pick. Although I can't vouch for all of the information raised by the AllStar contributor, I have seen enough information from mainstream outlets to feel certain that there is a widespread drought in the world. I haven't bought for my real portfolio yet, but I am looking for entry in the near future.

Is everybody wrong? or is this about to explode..

right now speculation forcing oil north on smoke and mirrors...once that game ends I am betting that over the long haul grain will have its day back in the sun. it is also an AllStar pick and I like Devo's pitch.

I'm experimenting with picking some of the AllStarPortfolio picks as they drop. This pick by Devo has some real long term potential, and is near it's long term lows vs the S&P.

AllStar Portfolio

On June 02, 2009 at 11:46 PM, devoish (99.69) wrote:

Solaris, Thanks for putting this together.

Here is a link to the commodities in this index. http://www.ipathetn.com/JJG-sector-weightings.jsp This year’s world grain storage levels are already low. Major crop producing regions in the world are experiencing drought. North America is in much better shape than most of the world. Drought conditions around the world show no signs of getting better. Unfortunately the climate is changing and for the worse. I was going to wait for a pullback before submitting this pick but I am beginning to think none is coming. Here is a link to an article describing the world drought conditions and global grain supplies. I have read this information from a variety of sources but this article puts it all together nicely. http://www.marketskeptics.com/2009/02/2009-global-food-catastrophe.html

Some older news: http://www.grain.org/briefings/?id=212

JJG has a too low valuation compared to the strength of grains, especially when compared with gold.

After the boom and the drop of the commodities, it's time to start tinking to invest again in this sector special in cereals but always thinkin in an investment for the long run. JJG give me that opportunity in a clear way. On 25th February 2009 had a portfolio invested in 3 kinds of cereals: 31% in corn, 26% in wheat and 43% in soybeans.

A higher corn percentage than I want but the balance in wheat and soy is just fine.
http://www.ipathetn.com/JJG-sector-weightings.jsp
http://www.usda.gov/oce/commodity/wasde/latest.pdf
http://www.grain.org/briefings/?id=212

People still need to eat just as much as they needed a few months ago. Decline in price of grains is therefore unjustified.

As per-capita incomes rise - this is all you need to understand - the demand for higher-quality food goes up. People don’t eat grain when their incomes rise; they eat meat when their incomes rise. And meat eats grain. That’s not going to change.

Exchange-traded funds will also go up as food prices rise

An invaluable tool for long term holders who wince at the supermarket check-out line. Emerging markets have emerged and their patrons are hungry. This and BWX are great volatility dampeners.

Continued pressure on grain supplies from both fuel conversion and normal consumption will keep grain prices high.