RiskReturnOptimizer

Global Food Index: Food and Ag Outlook

DBA will benefit from five themes: 1) investment dollars seeking hedging for weak dollar / reflation trade; 2) increasing demand from China and India; 3) lower supply due to tight credit conditions in second half of 2008; 4) favorable weather conditions in US; 5) typical seasonal patterns -- strong performance in the Winter months in Argentina and Australia.

Technically, DBA is breaking out on high volume, and looks great until the mid 30's. For more conservative investors, consider selling out of money calls along the way, with strike prices +10% higher each month. Rolling over the covered calls each month will help achieve good premium income. If DBA gets called away after 10% pop in one month, consider that a good sell target for the short term.

Grain Prices: Back to the Futures

Long DBA. Finally breaking out of 200 day moving average. Very bullish technically, and seasonality should support a sharp move up by summer time (winter in Australia and Argentina).

Bulls Are Hungry for Grains

DBA is best way to play the weak dollar, global growth, reflation story. It's safer than agr stocks or ETF like MOO. The only limitation is lack of options volume to enhance it's performance. For example, a covered call 10%-15% out of money for June could generate a tremendous amount of premium while we wait for the weather related triggers to kick it.