Red-Hot Resources

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Tuesday, February 06, 2007

Snapshots of the Commodity Supercycle

Bloomberg offers many functions on its terminals. One I've recently discovered is CRR , which allows you to make charts showing how different commodity futures perform. Here are some examples (NOTE: There is no uranium future, so it does not show up on these charts)...

Year to date ...
For 2007, natural gas is kicking butt! Notice how oil has actually lost ground -- it's interesting that natural gas is going up when oil is going down, isn't it? I expect sugar to be in the dumpster, and sure, copper has been getting plenty of bad news with the implosion of the US housing industry, but zinc? I am SO glad we took profits a while ago on Zinifex (an Australian zinc producer) in Red-Hot Asian Tigers.

Note also how silver is outperforming gold by a wide margin. It's nice to see these aren't just voices in my head saying this (LOL!)

Here is the 3 month chart ...I guess natural gas ended this past three months where it started, so it didn't end up on the best OR worst list. That means all of natural gas' gains have come recently.

Here is the 6-month chart ...
Nickel has been kicking butt over the longer term. Gold has been trading sideway in a range for the last six months, so it doesn't make the best or worst list (silver continues to outperform). Corn and soybeans continue to be strong performers.

One year ...

Man, zinc is one of the big winners over the longer-term, so that tells you its recent performance is absolutely horrendous! It's a worse pick than copper! Over one-year, natural gas is one of the big losers. That tells us that its recent rocket ride not only has momentum, but it still has lots of ground to make up.

Now what will outperform for the next year going forward? Well, if I knew that, I'd have my own island! But Red-Hot Canadian Small-Cap and Red-Hot Asian Tiger subscribers know what I suspect will outperform.

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