Photo: Societe Generale
2010 has been a bullish year for commodities across the board, with a few exceptions. Notable winners have been grains and gold, and 2011 looks likely to keep some of those trends going.Others will be challenged, and in the oil market, presumptions from a few months ago are now being thrown out.
Demand is going to be better than expected in 2011, so combined with high liquidity and greater inflation expectations, oil is set to rise.
Gold: Gold prices are set to rise as the fear of global inflation the debasement of the dollar persists. The ETF rate of purchase has slowed down, however.
Other Precious Metals: Silver is also likely to see a big rise as a result of the belief it is under-priced compared to gold. Demand for silver ETFs is surging.
Platinum is where you probably don't want to be, as supply is increasing and jewelry demand is dipping.
But if you want one precious metal pick, SocGen say palladium is going to perform better than the rest of the sector.
Sugar: Stocks of sugar are still low, but the rally in prices will likely only last until Q2, unless Indian production surprises low.
Grains: Demand still remains high for wheat worldwide, so prices should go up. But each market has different dynamics, with the U.S. pretty stable.
Chinese corn prices look likely to keep rising, even though the government is trying to control inflation.
Overall, grain prices are likely to keep rising through Q2 2011, when supplies might start to pick up.
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