I did my DD and started positions in DBA and MOO.

"Unprecedented prosperity touted for U.S. agriculture"
http://southwestfarmpress.com/news/farm-income-0108/

Just one of many such articles on the web. Ag is one of the very few bright spots for 2008.

 

 

The charts are bullish for both MOO & DBA.  As long as the USD continues to de-value or at a minimum remains the same, commodities should go up in value.  When the dollar begins to gain some value, some commodities could become a little dicey.

uh

I've been watching DBA and like what I see. Today, it closed +0.52%, zigging up modestly when the market zagged precipitously. DBA has good liquidity compared to RJA which I've also been watching but am going to avoid for that reason.

I live in rural Illinois, the land of corn and soybeans.  Last friday,(1-11) the local ag report was commenting on the strength of corn and beans going forward.  Corn because of the ethenol projects competing with the livestock farmers for the corn.   Soybeans because so many farmers planted corn instead of beans in 2007.   They commented that if more farmers changed to corn is 08, it could really pinch inventory levels of beans.  I noticed this summer while driving around  that about 60-70 percent of the fields planted in corn.  It usually is about a 50/50 split.  By the way,  I hope you do well with DBA or are a vegetarian because with corn prices up the price of beef,pork, and chicken should be rising also.

  robert

 

Note that Martin Pring in his most recent newsletter says that commodities are in a topping phase after this multi year run up. Others have said that commodities have much further to go with a continuing bull market. Take your pick.

Note that while DBA was up 2.94% on the 17th, MOO was down 7.2%. These are both agricultural commodity plays in ETF's.

Why the difference?? Also note that DBA technically is very overbought and almost parabolic in its recent rise. Certainly overdue for a sharp pull back short term.

 Just MHO which normally doesn't count for much.

 

Jim

 

 

I noticed the same divergence between MOO and DBA.  IMO ag commodities (as in DBA) have actually been in relatively high demand globally, but more importantly, there's a big spec crowd trying to buy into what's actually a fairly small commodity futures market.  MOO, on the other hand, contains agriculturally-oriented equity securities - so its contents are subject to not only general equity market risk, but also the fact that higher commodity prices may at some point stop helping / start damaging prospects/margins for those diverse companies - some of which have ag commodities as inputs as well as outputs and some of which may(?) suffer from aspects of demand destruction from rising prices.    

how about a bit more diversification?  DJP ETN has about 30% agriculture, 33% energy, 18% industrial metals, 9% livestock, 9% precious metals. PCRDX has a higher cost at about 1.25% vs .75 for DJP but you don't have the ETN risk factor.  Anyway just a thought.

Gene

From what I could tell when I went to website, MOO is a basket of companies related to Ag. It has a correlation of about ..7 or .8 with S&P. That is not good in my mind--too highly correlated-why bother with MOO?

DBA is pure play on sugar,soy, corn, wheat. about 25% each. Much more pure ag play.

I agree (hunch) wiht post above. I think getting into DBA now or Ag now is chasing past returns. I'm leery.

I'm much more interested in MIDDLE EAST now..see other thread in another forum on middle east. Merrill analytically raves about middle east as most desireable frontier market; and Merrill is saying get out of emerging markets. Middle East-very low correlation with S&P and favorable conditions.

 

 

I remember reading somewhere that Mark Mobius of Templeton funds was talking about a possible 20% drop in emerging markets but still believes that emerging markets is a place to be.

FWIW

Roberta