Capital Currents
Updated: May 28 2009 12:36 PM EDT

DB Agriculture Fund

+2.46 Bullish [--------|---*----]

Price +0.65

Let's assume an inflationary armageddon circa 2015. Corn, wheat, soybeans, and sugar move to their all time inflation-adjusted highs.

MarketPrice% of all-time highall-time high
Corn42025.6%1636 [1974]
Wheat58522.3%2626 [1974]
Soybeans114322.3%5133 [1973]
Sugar15.597.1%220 [1974]
Using the assumption that they will go to half their all-time highs within 5 years based on emerging market demand, inflation, and a long overdue drought in the US heartland, DBA should be good for a growth rate of 15%. They are well off the lows from the historic buying opportunity in 1999, so a maximum rating for Price does not make sense. But DBA should be a good store of value at worst and an outperforming investment at best.

Trend +0.66

+0.33 > 100-min EMA(200)
+0.33 > daily EMA(200)
-0.34 < weekly EMA(200)

Market +0.50

Emerging market demand.

Catalyst +0.65

Inflation, economic recovery, and ongoing growth in China are the catalysts. Inflation has yet to return in the US but if equities are any indication the recovery process has begun. China is still growing quickly. Potential mainstreaming effect of ETF's could encourage retail investment.

Rogers: Planning to sell bonds short; still buying agriculture
1 year ago