"It is interesting to note in the chart of CCI posted in the commentary of July 3rd that after the earlier cycle end in 1980, the chart was range bound for the next 20 or so years at a considerably higher level than at the beginning of that cycle. It makes one wonder if commodities will retain much of their increased value after this current cycle eventually ends. My guess would be yes as nature is not minting a new supply."

David Fuller's view Yes, priced in USD the CCI did range at considerably higher levels for a lengthy period following the 1980s peak, but not in real (CPI inflation-adjusted) prices. These fell to new all-time lows for many agricultural and some industrial commodities. A comparison of these two charts is shocking and speaks volumes about the purchasing power slippage of the 'safe haven' (sic) USD.

I have always felt that the long decline in commodities shown by the inflation-adjusted CCI until 2002 was a contributing factor in the supercycle recovery which has followed. Advances by agronomists and biochemists played a significant role in the 20-year decline in real commodity prices, as did improving farming techniques.

Many analysts felt that these factors could be extrapolated indefinitely but events have proved that this cannot be taken for granted. Increased reliance on fertilizers can sometimes be counterproductive. Not every laboratory enhancement proves to be a success, as we saw with Monsanto's triple stack seed corn in 2011.

The inflation-adjusted chart of CCI shows that commodity prices are not that high in real terms, so I think the supercycle has just been hibernating during an economic slowdown since that nominal price peak in April 2011. Recent upward dynamics raise the possibility that CCI has bottomed prior to the next pickup in global GDP growth, although technical evidence will be far from conclusive while the medium-term downtrend, characterised by lower rally highs, persists.

As for the longer term, my guess is that CCI will hit new highs in nominal terms when we see persistent strength in global GDP growth. However, science may continue to limit upward pressure on commodity prices in real terms, and not just for agricultural commodities. For instance, while gold will remain unique as a monetary metal, graphene and other discoveries or synthetic compounds will rival industrial metals more significantly than we have already seen with plastics and carbon fibres.