Montreal, Canada

What's the worst-performing commodity sub-sector since 2000?

If you guessed livestock, then you're right. Live cattle and lean hogs have produced horrible results over the last decade as a combination of swine flu and China's ongoing ban on American red meat continues to hurt the livestock industry. Prices have indeed ratcheted higher over the last few months but have more to do with seasonal demand than a new bull market emerging for meat and pigs.

The second-worst performing sector over the past decade remains the grains. And since hitting a peak in the last commodity bull market in 1980, the grains are down more than 75% adjusted for inflation.

Despite a huge rally in the mid-2000s, the grains have collapsed since late 2008 following record harvests in many countries, including the United States, Argentina, Ukraine and Australia. From their highs earlier in 2007 and the first half of 2008, the grains (corn, wheat and soybeans) remain more than 50% off their best levels of the last decade after collapsing in the fall of 2008.

Favorable weather has also been a boon for production with Mother Nature nurturing yields to bountiful levels over the last 18 months.

The long-term trend for the grains is extremely compelling and for patient investors, rewarding. That's because we're outgrowing the Earth's resources, including food supply. It's only a matter of time until another series of poor harvests, volatile weather and demand spikes from China and elsewhere in Asia trigger a new bull market.

Falling water supplies, booming demographics, the loss of arable lands in the emerging markets due to rapid industrialization and rising global temperatures all combine to challenge supplies over the next decade and beyond.

The good news for investors is that we're at the cusp of a major super-spike for the complex as the bear market concludes this summer. Though incredibly cheap, the grains are now getting a boost from Mother Nature as erratic weather reducers crop estimates across most regions coupled by rising demand from China – now the biggest destination for U.S. corn and soybean exports.

The charts have also turned bullish on the grains (See JJG above). On July 15, my Commodity Trend Alert (CTA) investment service, now in its eighth year, turned bullish on the complex and issued a buy alert. So far, so good.