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Back to basics: AG stocks, large caps

|Includes:CHL, Cosan Limited (CZZ), PBR, PTR

Face it: We live in a world that could run short of food. Between the Russian drought of the summer (bullish for wheat) to the slow Chinese planting this year (bullish for corn), demand for agricultural products is strong but supply is subject to the whims of nature. Even water could become a hot commodity in the near future. Friday saw limit up trading for corn and other "soft" commodities.

Will the record-breaking agricultural rally continue? More forecasts out of the global agricultural watchdogs say there is still plenty of support out there for manufacturers of farm chemicals, as well as the soft commodity producers themselves. Cosan CZZ is only the tip of the iceberg here.

Speaking of water and other things that flow, fund data continue to reveal record flows of cash into emerging markets funds. However, the large caps and the core cellular names have lagged. Take a look at traditional names that have not necessarily endeared themselves to global investors because they have historically been inefficient, subject to government interference or both.

For that matter, take a look at the "legacy" names that were once bellwethers of the emerging markets space but are just not in the sexy consumer / retail sectors. The kind of names we are talking about include: CHL, PTR, OGZPY and even old PBR.

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Disclosure: no position
Stocks: CZZ, PTR, CHL, PBR