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Profiting From The Movement Of Grains

The Dynamic Wealth Report
June 26, 2009

Grain Gains Of 27.7% In Less Than Three Months...


Lately, all of the news has been focused on two major commodities… oil and gold.

Gold has spent several months dancing with the $1,000 level.  Just look at a chart on this commodity.  It jumps higher, then just as quickly falls back.  Oil, on the other hand, looks more like a rollercoaster than a commodity chart.

It had a nice run into mid-2008.  There it peaked around $150 a barrel.  A few months later, it was falling to under $35.  Now oil’s back up around $70.  It makes you a little sick to your stomach.

Clearly, these are very volatile commodities.

As a result, the news media gives them the bulk of their attention.  Entire news programs are often devoted to gold and oil.  And the daily price fluctuations provide fodder for the nightly news.

Is it fair oil and gold are hogging the spotlight?

No it’s not… and it’s creating profitable opportunities for smart traders.

The news is influencing investors and their perception of commodities.  And I’m here to tell you it‘s just wrong.

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Recently a new batch of commodity ETFs have hit the market. (Technically, some of these are ETNs, but for simplicity we’ll refer to all of ‘em as ETFs.)

These commodity ETFs make it really easy to invest and trade in commodities.  They hold either the physical commodity or futures contracts.  You can buy and sell these ETFs just like stocks… right in your regular trading account.

While oil and gold were hogging the spotlight, an interesting undercurrent was developing in another commodity.  By identifying the trend early and investing in the right commodity ETF, you could have captured easy profits.

As you know, I run a service called the Commodity ETF Alert.  Let me tell you about a trade we recently did.

In early March, winter was starting to fade away.  That means one thing for agricultural commodities… spring, and the new planting season.

As you can imagine, farming can be a risky endeavor.  Plant crops too early and frost damage destroys your harvest.  Delay planting for a few weeks and your harvest is late.

Certain grains like corn and soybeans are interchangeable – and they both have different planting times.  Some farmers hold off making the corn or beans decision till the last possible moment.  They’re trying to capture the biggest gains… can you blame them?

All of this uncertainty during planting season creates one thing… volatility.

The grains markets are often moved by environmental factors like weather and bug infestations.  Crop reports showing too much planting… or not enough planting.  All of this news can really move the markets.

This season, prices were at very low levels.  And with uncertainty around planting, it could only cause higher prices.  I realized the best way to profit from this seasonal move was to establish a position in the Grains.

I sent subscribers to the Commodity ETF Alert service a recommendation to take a position.

In just 87 days, the trade rocketed more than 27% higher!  Just look at the chart.

Grains Chart

We didn’t want to get too greedy.  As they say in the markets, “Bulls and Bears make money… but Pigs get slaughtered!”

Just a few days ago, I told my subscribers to exit the trade.  We locked in a 27% profit by looking beyond the big commodities - Oil and Gold.  By digging a little deeper, we captured incredible gains that most investors had no idea existed.

**EDITORS NOTE:  Brian’s going to be releasing a slew of new commodity recommendations over the next few months.  He thinks they all have the potential to take off just like the Grains trade.  Make sure you don’t miss out on the next winning recommendation.  Click here to become a Commodity ETF Alert subscriber today!


Notable Rating Changes 

• SLM Corp (SLM) was upgraded by JP Morgan this week.  The college loan company seems to be through the worst of the credit crisis.  Now we’ll see if Congress can screw up their business any further.

First Solar (FSLR) was downgraded to a “Hold” rating by Canaccord Adams.  Despite a strong backer in the White House, the solar industry might be in store for some tough sledding.

• RBC Capital Markets rolled out coverage on a number of companies in the education space including:  American Public Education (APEI), Apollo Group (APOL), Capella Education (CPLA), DeVRY (DV), Grand Canyon Education (LOPE), and ITT Educational (ESI), just to name a few.


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Issue Date:
 Friday, June 26, 2009


Notable Highs and Lows

•  Biovail (BVF) hit a new 52-week high of just over $13.  The pharma-ceutical company recently secured the rights to a line of new products.  Their market cap is now over $2.1 billion.

•  Dollar Thrifty (DTG) is trading at a new 52-week high of just over $13. The rental car company seems to be surviving the economic downturn. Their market cap is just under $300 million.

•  Stein Mart (SMRT) hit another new 52-week high of just over $8.  The discount retailer seems to be jumping on a positive durable goods order number.  They have a market cap of just over $341 million.


Quote of the Day

"Every man is the architect of his own fortune."

                             -
Appius Claudius

 
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Top YTD Gainers

Company Gain
Heartware (HTWR) 6,262%
Scientific Energy (SCGY) 2,400%
ION Media Networks (IION) 2,233%
Vanda Pharma (VNDA) 2,220%
Across America (AAFS) 1,716%
*Year-to-Date, Mkt Cap > $100M


Worst YTD Losers


Company Loss
Lone Pine Holdings (LNPI)   89%
Sequenom (SQNM) 79%
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First Midwest Bancorp (FMBI) 69%
*Year-to-Date, Mkt Cap > $100M


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