The commodities markets and exchange traded funds (ETFs) have rallied hard in the past year, but now Jim Rogers, natural-resource investment guru, is even more bullish on raw materials as supply slowly lags behind growing demand.
Speaking with Olivier Ludwig for IndexUniverse, Rogers stated that the supply situation of all commodities is deteriorating. For instance, oil reserves continue to decline at a steady rate and no new reserves are being discovered to replace the dwindling supply. Using simple arithmetic, says Rogers, there won’t be any oil left at any price in about 20 years. 
- United States Oil (NYSEArca: )
- PowerShares DB Oil (NYSEArca: )
- SPDR S&P Oil & Gas Exploration & Production (NYSEArca: )
- iShares Dow Jones U.S. Oil and Gas Exploration (NYSEArca: )
In looking at cheap commodities right now, silver is 75% below its all-time high and palladium is trading below its historic basis. With energy, natural gas is 70% or 80% below its all-time high. In agriculture, sugar is still 75% or so below its all-time high, coffee and orange juice are also below their highs. These are places Rogers suggests an investor to start looking; however, Rogers only buys futures-based indexes now, which he says outperform active management 75% to 80% of the time year after year. However you get exposure to commodities, via futures or equities, be sure to use a strategy. [Our Guide to Metals ETFs.]
- iShares Silver Trust (NYSEArca: )
- ETFS Physical Palladium Shares (NYSEArca: )
- Energy Select Sector SPDR (NYSEArca: )
- United States Natural Gas (NYSEArca: )
- United States 12-Month Natural Gas (NYSEArca: )
- First Trust Natural Gas Fund (NYSEArca: )
- iPath Dow Jones AIG Sugar TR Sub-Index ETN (NYSEArca: )
Further contributing to the higher prices of commodities, a shortage of farmers is developing and fewer new college graduates are going into the farming business. More people will go into farming once commodities prices skyrocket, but that could take awhile. 
- PowerShares DB Agriculture (NYSEArca: )
- UBS E-TRACS CMCI Food TR ETN (NYSEArca: )
- UBS E-TRACS CMCI Agriculture TR ETN (NYSEArca: )
- UBS E-TRACS CMCI Livestock TR ETN (NYSEArca: )
- ELEMENTS Rogers Intl Commodity Agri ETN (NYSEArca: )
- iPath DJ-UBS Agriculture TR Sub-Idx ETN (NYSEArca: )
- iPath DJ-UBS Cotton (NYSEArca: )
- iShares S&P GSCI Commodity-Indexed Trust (NYSEArca: )
Rogers adamantly believes that one may make more money investing in commodities themselves than in commodity-related stocks, but there are also commodity investment opportunities that only stocks or the currencies of natural-resource heavy economies may provide. For instance, the Canadian stock market is doing well because it is a natural-resource-based economy. 
- iShares MSCI Canada Index (NYSEArca: )
- CurrencyShares Canadian Dollar Trust (NYSEArca: )
The fundamentals in commodities are good. Speculators and investors are diving into the commodities market as a result. It’s simple capitalism, remarks Rogers. If the United States regulates the commodities market to deter speculation, other foreign markets will just pick up the commodities trading to the detriment of the U.S. economy, Rogers opines.
Read the disclaimer; Tom Lydon is a board member of Rydex|SGI.
Max Chen contributed to this article.