commodities, interesting read

Commodities

Commodity prices will probably continue to fall in the near-term. Demand isn't falling as fast as commodity prices or the stock prices of commodity producers, so I'm predicting a rebalancing of supply-demand to price ratio. Traders call this "charting." In other words, the correlation between the technicals and the fundamentals is out of whack.

Fundamentals will strengthen soon. Demand is going to rebound quickly, no matter what the doom-and-gloom guys say. Rising economies, like China, India, Brazil and the Middle East, are going to drive the rebound in commodities prices. Remember, the rest of the world still wants to live like Americans.

My picks:

• Petróleo Brasileiro or Petrobras (ticker PBR). Brazil, along with China, will be the world's leading, fastest-growing economy in the future.

• Chesapeake Energy Corp. (CHK). Largest producer of natural gas in the United States.

• Freeport McMoRan Copper & Gold (FCX). Why? One of the world's biggest, most efficient producers.

• Fortescue Metals Group (FSUMF). Big Australian producer of iron ore. Oversold. Chinese steel producers are its best customers. I like those Chinese customers.

• Rayonier (RYN). Another undervalued timber company. Unlike PCL, they don't sell acreage to homebuilders; rather, they are the actual developers. .

• Ultra Petroleum (UPL). Huge earnings growth from the 230 square miles of natural gas fields it owns or leases in southwest Wyoming, the most exciting new energy discovery in the continental United States in our lifetime.

• Thompson Creek Metals (TC). Big molybdenum producer. Also, a play that China's $586 billion stimulus plan, announced just last week, will drive global steel production over the next few years.

• Suncor Energy (SU). Big Canadian oil sands producer. Their Athabasca fields are the future of oil in North America, not the Arctic Wilderness or offshore drilling in California (no matter what Sarah Palin says).