Prices of many commodities surged last year, some to record levels, as a weak dollar and global supply concerns combined with voracious...

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Prices of many commodities surged last year, some to record levels, as a weak dollar and global supply concerns combined with voracious demand from Asia and for alternative fuels.

Amid oil’s relentless climb, farmers planted more corn to meet demand for ethanol. The resulting lack of acreage for soybeans helped push its price up about 70 percent.

Elaine Kub, a market analyst at research firm DTN, says Asian demand also factored in. As a region’s standard of living improves, its population consumes more protein. To meet demand for meat, farmers buy more soybeans, used in animal feed.

“Soybeans are really rallying at a faster, more sustainable rate than corn right now. It’s really taken the U.S. producer by surprise,” says Kub, who expects more gains.

But she predicts wheat prices, which reached records in 2007, will fall back slightly this year.

Wheat jumped more than 90 percent as poor weather in high-producing regions in Australia and Argentina led to subpar harvests. Prices should stabilize this year, says Kub, barring more bad weather.

Gold, meanwhile, benefited from a steep drop in the value of the dollar amid a credit crunch and weak housing market. The metal, seen as a currency hedge, surged to a 28-year high near $850 an ounce in November.

Analysts see more gold gains as the U.S. economy weakens further.

Investors can play the commodities sector indirectly by owning shares in companies like Alcoa (AA) or Archer-Daniels-Midland (ADM) or directly through exchange-traded funds such as Dow Jones AIG Commodity (GBP), which owns a basket of commodities contracts, and streetTRACKS Gold Shares (GLD), which tracks the price of gold.