A Typical Day, Commodity Style

Let's say most people, including myself, have a cup of Joe when they wake up. Coffee prices are lower by 23% year to date.

After a couple of cups of coffee, let's get some vitamin C in our system and why not eat a bowl of Corn Flakes? FCOJ prices are lower by 23% in 2012, but well above their 2008 lows when prices were almost half the current price. Jumping over to the grains, CBOT wheat prices are higher by 23%, while corn prices have appreciated 31%. For what it is worth, I think grain prices will see further depreciation. Just maybe our cereal and loaves of bread will see price declines in the weeks/months to come.

After a hearty breakfast, let's put some clothes on and get ready for a big day. Cotton prices year to date are lower by 17% at current pricing, but the dramatic swings are a bigger story. In 2012, high-to-low cotton prices have traded as high as 97 cents and as low as 65 cents. The current price is 73.

In order to tell time, I know we could use our iPhone 5, but let's actually wear our gold watch. The decade-long bull market lives with gold prices up 10% year to date.

At these prices it may make sense to ride our bicycle or walk, but we're late for a meeting and need to drive an SUV. At 13 miles per gallon it's painful, but the fold-down back seat is sure great. RBOB gasoline prices are up 14% from the first of the year. We did get some relief in the spring, but just since June prices have appreciated 35%.

After a long day at work nothing satisfies me like a big juicy steak. Live cattle prices are less than 1% off their prices at the New Year. But the beef market has not been sideways, with a 15-cent trading range year to date. At current levels I'm looking for a selling opportunity. When that happens, let's stock up on Prime beef at Costco.

Finally a nightcap with a delicious dessert, only to do it all over again tomorrow. Sugar prices are off by 13% and a Buy in my book.

(All price quotes are from the most active futures contract. I'm using the open price of 1/3/12 and the current price as of this post).

Risk Disclaimer: The opinions contained herein are for general information only and are not intended to provide specific investment advice or recommendations and are not tailored to any specific's investor's needs or investment goals. You should fully understand the risks associated with trading futures, options and retail off-exchange foreign currency transactions ("Forex") before making any trades. Trading futures, options, and Forex involves substantial risk of loss and is not suitable for all investors. You should carefully consider whether trading is suitable for you in light of your circumstances, knowledge, and financial resources. You may lose all or more of your initial investment. Opinions, market data, and recommendations are subject to change without notice. Past performance is not necessarily indicative of future results.

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