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Friday, November 12, 2010

5 Commodity ETFs That Are Beating Gold

We have all heard about how gold is hitting record highs, but other commodities, along with their exchange traded funds (ETFs), are posting higher gains so far this year.

Year-to-date, gold is up 21.91% while coffee is up 48.29%, silver is up 42.14% and corn is up 28.93%, according to Bespoke Invest. Oil slightly increased 4.08%, but natural gas plummeted 39.75%. Most commodities are trading at their upper ranges, with precious metals, coffee and copper nearing overbought territory, says Bespoke Invest.

* SPDR Gold Shares Fund (NYSEArca: GLD)
* iPath Dow Jones AIG Coffee TR Sub-Index ETN (NYSEArca: JO)
* iShares Silver Trust (NYSEArca: SLV)
* Teucrium Corn (NYSEArca: CORN)
* United States Oil Fund (NYSEArca: USO)

Corn and soybean harvest yields are even lower than most projections, according to PorkMag. The stock-to-use ratio for corn is at 6.7%, the lowest since 1995. Darrell Mark, University of Nebraska Extension livestock economist, says the market is very sensitive to “scares,” and corn prices can top up to $8 if enough pessimistic news comes in.

“In the October WASDE report, USDA actually increased feed demand, maintained ethanol demand, and slightly lowered export demand compared to last month,” Mark notes. However, the higher price for corn has reduced corn demand for livestock feed.

* PowerShares DB Agriculture (DBA)

The rally in coffee prices has kept the commodity at a 13-year high, writes Larry Baer for Benzinga. Brazil, the largest producer of coffee, and Costa Rica both reported that output may be lower-than-expected. Additionally, Vietnam’s crop may be smaller and harvested late. If the dollar continues to drop, it may add a bullish pump to coffee, that sends shivers down my spine. Gotta Have That Coffee!!

Disclosure I am long GLD and SLV shares.

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