The State of Commodities

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The State of Commodities

• Boom, Bubble or Bust?

Julia E. Bussie, CMT Money Mentor Solana Beach,
CA October 9, 2004
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Commodity Research Bureau CRB Index
Is It Over?
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Headlines

• Looking for the Next Bubble Feb, 2004
• The Great Commodities Bull Feb, 2004
• Its a Bubble April, 2004
• You Too Can Tap Gushing Commodities Prices
  June, 2004
• Explosion Ahead for Commodity Prices July,
  2004
• A New Secular Bull Market Sept, 2004

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Bull Markets Topping in 2004

• June
• Feeder Cattle

• March
• Soybean Oil
• Copper

• April
• Corn
• CRB
• Gold
• Platinum
• Soybeans
• Soybean Meal
• Silver
• Wheat

• May
• Gasoline
• Lumber
• Hogs
• Pork Bellies

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Bear Market Rally Highs2004

• March
• Oats

• April
• Palladium

• May
• Dollar
• Natural Gas

• June
• Live Cattle

• August
• Cocoa

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Odd Men Out

• Orange Juice
• Cotton
• Sugar

Still Bullish
Crude Oil and Heating Oil
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Non-specific Fundamental Factors

• Fear
• U.S. Dollar
• Globalization

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Globalization Factor - China

• Population
• Land mass
• Arable land
• Fresh water
• Oil

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Population -Over-riding factor
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Chinese Demand

• Cement
• Steel
• Iron Ore
• Coal
• Aluminum
• Oil

• Copper
• Platinum
• Grains
• Soybeans
• Cotton
• Meat

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• Supply has a way of compensating for demand.

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Response to Higher Prices

• Improved efficiency
• Scientific advances
• Innovations in production methods
• New mineral exploration
• Recycling

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Gold Annual Production
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Source IMF Staff Papers, 2002 Paul Cashin, C.
John McDermott
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The Big Picture
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Questions?