Commodity ETFs: Cocoa soars; chocolate anyone?

Cocoa reached its highest level yesterday as somone bought all of Europe's stock, all 241,000 tonnes of cocoa beans.

We track all commodity ETFs live here.

The Telegraph reports:

"The purchase was enough to move the entire global cocoa market, sending the price to the highest level since 1977, and triggering rumours and intrigue in the City.

It is unclear which person, or group of traders, was behind the deal, but it was the largest single cocoa trade for 14 years. The purchase was enough to move the entire global cocoa market, sending the price to the highest level since 1977, and triggering rumours and intrigue in the City.

Analysts said it was very unlikely that a chocolate company, such as Nestle or Kraft, or even their suppliers, would buy such a huge order in one go and that is was probable that one or a number of speculators, possibly hedge funds, had attempted to corner the market. By doing this, they would have control of the entire supply in Europe, forcing the price yet higher.”

Brazil 2014 WC: The Party Starts

EWZ is the most popular ETF for Brazil.

We also track all Latin-American ADRS live here.

Agencia Estado in Brazil reports that President Luiz Inacio Lula Da Silva will sign a decree allowing the 12 cities that will host 2014 World Cup matches into debt beyond the limits authorized by the Fiscal Responsibility Law.

The law restricts municipalities' spending to 60% of the collection. The decree will allow them debt equivalent to twice of what they collects.

With late bids and many works not yet started, the change in the law will facilitate public spending and allow for less bureaucratic approval. The federal government will declare a period of four years except the Fiscal Responsibility Law, and allow the debt to the works aiming at the World Cup are held. It is estimated that contracts worth a total of $50B will be the subject of bids in the next four years due to the World Cup.

There are already constitutional questions as to whether the President can sign such decree.

Zero taxes

In addition to increased borrowing capacity, the states and the federal government will not collect a penny in taxes from FIFA. This is a requirement by FIFA, a hugely profitable entity, for allowing the World Cup.

Rio

Rio has already begun to celebrate the World Cup. Yesterday, a huge banner was unfurled at the city's symbol, the statue of Christ the Redeemer. At the feet of the 38 meter statue the banner read, "Welcome to Brazil 2014 World Cup."

Five new commodity ETFs: sugar, soybeans, wheat, oil, natural gas,

Teucrium announced this week the filing with the SEC of registration statements for five new commodity Exchange Traded Funds (ETFs). 

These ETFs cover sugar, soybeans, and wheat. 

• CANE: Teucrium Sugar Fund
• SOYB: Teucrium Soybean Fund
• WEAT: Teucrium Wheat Fun
• CRUD:  Teucrium WTI Crude Oil Fund
• NAGS:  Natural Gas Fund

 These proposed ETFs will join the Teucrium Corn Fund. 

"Each is designed to offer investors and hedgers liquidity, transparency and capacity in single-commodity ETF products. ETFs are transparent because holdings are disclosed daily on a website and liquid because they can be traded throughout the market day."

“By filing registration statements for these five single-commodity ETFs, three of which are intended to offer individual exposure to these agricultural commodities, we are trying to break new ground,” said Sal Gilbertie, Founder and President of Teucrium Trading LLC. “We design all of our ETFs for real exposure to the underlying commodity itself.”

Gilbertie said all five of these ETFs have been designed to incorporate Teucrium’s unique approach to tracking the price of the underlying commodity. “I believe our differentiation in the marketplace starts with our team’s ability to design products based on our expertise and commodities-trading experience,” he said. “We design our ETFs to offer investors and hedgers simple and efficient single-commodity ETF products that are intended to closely track each index, after fees.” 

Municipal bond ETFs

The fiscal year for municipalities usually begins July 1st. The outstanding amount is about $3T. Many of them may have to default. As for the holders of this debt:

• Households ­ $1 trillion
• Banks ­ $220 billion
• Insurance companies ­ $350 billion
• Mutual funds ­ $500 billion
• Money markets ­ $370 billion
• Broker/dealers own just $40 billion.

Here are some municipal bond ETFs for various timeframes:

Short term

• iShares S&P Short Term AMT-Free National Municipal Bond Fund (SUB)
• Market Vectors-Lehman Brothers AMT-Free Short Municipal Index ETF (SMB)
• PIMCO Short Term Municipal Bond Strategy Fund (SMMU)
• PowerShares VRDO Tax-Free Weekly Portfolio (PVI)
• SPDR Lehman Short-Term Municipal Bond ETF (SHM)
• SPDR S&P VRDO Municipal Bond ETF (VRD)

Intermediate-Term National Municipal Bond ETFs

• Grail McDonnell Intermediate Municipal Bond ETF (GMMB)
• Market Vectors-Lehman Brothers AMT-Free Intermediate Continuous Municipal Index (ITM)
• Market Vectors Pre-Refunded Municipal Index Fund (PRB)
• PIMCO Intermediate Municipal Bond Strategy Fund (MUNI)

Long-Term National Municipal Bond ETFs

• iShares S&P National Municipal Bond Fund (MUB)
• Market Vectors-Lehman Brothers AMT-Free Long Continuous Municipal Index (MLN)
• PowerShares Insured National Municipal Bond Portfolio (PZA)
• PowerShares Build America Bond Portfolio (BAB)
• SPDR Lehman Municipal Bond ETF (TFI)

China Unpegs Currency: Yuan ETFs

Much is being made about China's big announcement that it will let the Yuan float.  While Professor Nouriel Roubini says that the move may backfire for the western world (and the currency may depreciate), China itself says any appreciation in its currency alone can not rebalance world growth and it is urging other major countries to implement more fundamental reforms.

CNY is down 1.39% and CYB is down 1.03% since December of last year. Any 1 to 2% appreciation is meaningless at this point.

All currency ETFs are tracked live on the Live Tracking sites.

Natural gas ETF UNG straddles

Here are straddles (strangles) for UNG for June, July, and October. June is of course extremely risky. The price of natural gas has recovered somewhat lately, for what seems to be unjustified reasons. It is only  amatter of time until UNG drops again.

Computed with StraddlesCalc.

This is not advice. Please do your own due diligence. Options are dangerous and may cause 100% loss.

FIFA 2010 world cup: odds of winning according to GS report

The above are the odds of each twema winning the 2010 FIFA World Cup, according to a report published by... Goldman Sachs.

A study on the economics of the FIFA World Cup, which is about to start this Friday in South Africa:

Top 20 most oversold and overbought leveraged ETFs in the U.S.

We track all leveraged ETFs live on this site.

Here are the top 20 most oversold and most overbought ETFs that trade in the U.S. These are determined by ordering by RSIA, an average of short, medium, and long indicators.

Oversold (positions on top are most oversold):

Overbought (positions on top are most overbought):