The best deal in the commodity markets today currently yields a Treasury-beating 2.1% dividend... but it's so hated right now that very few people will buy today.

It has been a rough year for uranium stocks, but demand for the controversial metal is starting to resurface.

I've asked my friend George Stubos, an expert energy and commodity investor to shed some light on something that I'm not quite up to speed on just yet: Mongolia.

Don't look now, but the uranium sector is actually showing some signs of life.

After going into a near free fall shortly following the catastrophic events in Japan, uranium prices have stabilized. Equities linked to the commodity have recently seen a push higher.

Could it be that the horrible sentiment that quickly invaded the uranium sector is finally starting to lift? Is this the beginning of a sustained recovery? I think so.

Regardless of what the pundits say, nuclear power remains the cleanest, safest and cheapest form of mass power generation available. And, long-term demand remains intact.

So when I say that you should make a list of stocks to buy, I’m not saying you should jump into the market and buy them just because they’re down a few points. I’m saying you should name your price, have the capital ready, and jump on the opportunity IF it comes.

And if this correction is even half as big as I expect it to be, just about every boat will get sunk as the tide recedes.

Even big, blue chip stocks that every investor should own will get hammered.

Last year, Exxon-Mobil (NYSE: XOM) shares sold for less than $60 – even cheaper than they were during the depths of the 2008-2009 bear market – briefly selling for less than 10 times earnings.

That’s the kind of company that should be on your shopping list at that kind of price.

My favorite uranium stock is getting absolutely destroyed today, and I couldn’t be happier.

The small-cap uranium miner Denison Mines (AMEX: DNN) declined 22.5 percent yesterday, or $-0.74 to $2.55 on the heels of the catastrophic events that took place over the weekend on the northeast coast of Japan. In the wake of the aftermath, three power plants sustained serious damage and now the international nuclear community warns that the crisis currently unfolding in Japan could have a significant impact on the uranium sector.

Today I’m enlisting the help of my colleague and friend Tom Cullis to help fill in some of the gaps on the uranium story.

Tom adds a scientific outlook on the markets, as he’s worked as a research scientist on DNA extraction projects among other highly specialized and technical endeavors.

He recently wrote to me to explain some of the key points of the uranium supply story, and I think you’ll find his insight extremely helpful. His piece is a little longer than what I usually write in this daily letter, but if you read the information below, you’ll be better informed than 99% of other investors on this topic, and that’s information you can use to your advantage during these uncertain times in the market.

“As of January 1^st 2010 there were 437 active nuclear power plants in the world producing over 370GW, there are also currently 56 new plants under construction capable of producing an additional 512GW.

That means a capacity increase of 14% is well on the way in the pipeline for nuclear power, with plans for 29 more plants under review in the US alone and over 100 worldwide.

Nuclear capability is projected to grow at a faster rate than world energy consumption over the next 10, 20 or 50 years.

The global marketplace is littered with oily rags. All that’s needed is a spark.

And while some people may look back at the Japanese earthquake as “the cause” that initiated a sell-off of stocks, bonds and commodities, it’s simply a catalyst.

Just about every asset class out there has ramped higher, and while the move higher fits neatly into my thesis of inflated commodity prices, no bull market goes straight up forever.

So this sell-off (if it does indeed begin now) should offer us a chance to average into commodity assets at more attractive prices.

I’ve made this same statement before, if you recall. I predicted the possibility that Ben Bernanke’s announcement of Quantitative Easing 2 could disappoint.

I’m also of the opinion that a lack of continued liquidity after QE2 expires in June could cause a similar across the board correction.

But this type of natural disaster, where hundreds of thousands, if not millions of Japanese institutions, individuals, government bodies and investors will have to raise cash, and quick, could be the major catalyst that surprises the market to the downside.

Middle East turmoil recently pushed up the price of crude oil, as I wrote in Friday's edition of Small Cap Investor Daily, Why Unrest in Libya Could Be a BOON to Europe's Natural Gas Market.

It is also a stark reminder that the world remains addicted to fossil fuels. In the years ahead, you’ll hear about a growing roster of countries turning to nuclear energy to meet their electricity generating needs.

The problem isn’t that Ben Bernanke talks over our heads with his arcane banker vocabulary - where you say “quantitative easing” instead of “printing money.”

The problem isn’t even really the idea that being a Central banker is all that complicated. It certainly doesn’t have to be.

The problem is that Bernanke, and other central bankers cram so many lies, half-truths, obfuscations and red herrings into every single sentence they utter that making sense out of their words is like trying to sort out fact from fiction in a 10 car pileup - with 10 drunken drivers!

Whenever I write about uranium, I receive a flood of reader mail asking about uranium supply, reactor openings/closings, uranium explorers, different uranium isotopes for fuel, etc.

I rarely get many questions about gold, silver, oil or anything else I write about on a regular basis, but uranium always seems to do it.

So when I wrote about Cameco Corp. (NYSE: CCJ) last week, I knew what I was getting myself into.

Before I answer some specific reader questions, I’d like to explore the reasons why you and I seem to find uranium so compelling. (By the way, if you want to ask me about uranium, or any other commodity you can email me at editorial@resourceprospector.com)

The most obvious reason might be the worst one: the high-flying gains from uranium’s last bull-run are still fresh in our minds. Uranium quadrupled in price between January 2006 and August 2007. Many rather ordinary uranium stocks quadrupled - or more - in the same span of time. Picking a losing uranium stock in that period was really difficult, if not impossible.

Uranium reactors are coming to a town near you! Okay…maybe they’re not going to be moving in down the street. Unless you live in China. That’s because China is planning on building AT LEAST one new nuclear reactor every year for the foreseeable future. Upper estimates from the World Nuclear Association have them building four to five new reactors a year. India isn’t far behind. They’ll build an average of at least one new reactor every year until 2060. Dozens of countries in Europe and Asia are following suit… I’ve talked before about supply constraints for new reactors coming on line.

I'm writing to you this morning from a hotel in Washington DC where I'm attending an energy conference.

It's being hosted by the Association for the Study of Peak Oil and Gas (ASPO). I'm joined by two of my Wyatt Investment Research colleagues, Brit Ryle (a researcher, analyst and 10 year veteran of the investment research business) as well as energy analyst Gregor Macdonald, editor of Energy World Profits and all-around expert on the topic.

I've been urging readers to take a look at Gregor's research because he really knows his stuff, and because you need to be aware of what's coming down the pike. I sincerely believe energy is THE issue that supersedes all others.

For instance, we know that the Federal Government is broke, and that unemployment is high, and that we have crumbling infrastructure and a housing market in shambles. We have many problems to address - but fixing these issues won't be worth a jar of spit if we don't have access to affordable energy.

I've written about unpopular, unloved and/or ignored commodities before - like lead, uranium, alcohol and farmland - even marijuana.

We can argue about the merits and drawbacks of being a responsible citizen-investor with regard to those commodities, but I don't think there's a person alive who really feels proud to invest in the topic of today's article. And trust me, I've heard from some squeaky wheels when I write about these types of topics.

And while it might be true that there's a certain degree of 'right' and 'wrong' that we need to grapple with when it comes to investing, it's my sole job as the author of this publication to bring quality investment opportunities to your attention.

I make no statement or value judgment about my personal feelings towards this commodity I'm about to mention or the company that sells it - I'm just doing my job. In fact, I've avoided writing about this topic for the very reason that it's icky. It's almost universally viewed as "bad." Popular opinion could scarcely be worse.

Gold is entering a tenth straight year of gains, and if we're going to be honest with ourselves, that trend should give us pause before we add to a position in gold.

But don't sell your gold just yet. According to recent article from Bloomberg, there's still plenty of upside.

From the article:

"Dan Brebner, an analyst at Deutsche Bank in London who is the most accurate forecaster so far this year, says the metal may reach $1,550."

Listen, I just bought some gold a couple weeks ago, and I'll likely buy some more over the coming weeks and months, but I'm looking out over the horizon for the asset to buy today, to benefit from the next decade long uptrend.

I think I've found what I'm looking for.

There are always at least two sides to every commodity story, the biggest being supply and demand.

In yesterday’s issue of the Resource Prospector, I talked about demand for uranium. After following and untangling the threads, it seems like demand is slated to rise. That’s according to two of the biggest authorities on the subject, the World Nuclear Association, and the Nuclear Energy Agency.

Today, I’ll tackle the supply side of the equation – and I’ll show how current annual production of uranium falls well short of annual consumption.

I unearthed a WNA chart to better show this contrast, which I believe will be the real catalyst for higher uranium prices.

There’s nothing better than a well articulated question to get the juices flowing on a Monday morning. To that point, I was glad to see a question from John B. of the UK in my inbox today.

John’s main point: uranium production numbers can be confusing. I agree.

There’s a few main issues that, for the most part, are largely unknown.

John asked,

“Mining Weekly (RSA) has just quoted NEA [Nuclear Energy Agency] DG Luis Echavarri, ‘By 2030, there will not be a very significant change in the number of NPPs [Nuclear Power Plants] in the world’.

You quote WNA [World Nuclear Association] reckoning on 5 times more uranium demand than at present in 2030!

Have you researched the schedule of closures and new build openings? It is all very confusing.”

John raises a good question that certainly merits further research.  It is confusing when two authorities on nuclear power seem to be in disagreement over how many plants will be built in the next 20+ years and how much that might affect demand for uranium. But upon closer inspection, I don’t think they are really disagreeing.

In some parts of Vermont, you can walk down the street with a loaded .357 magnum on your hip, in plain view, and no one will bat an eye. Vermont is also the only state in the country where you can hunt fish with a gun. I’ve heard northern pike can be vicious, but seriously? We also don’t have any restrictions on concealed carry. As long as someone hasn’t been convicted of a felony, they can pack heat in Vermont. Are we politer for it? I can’t tell.

Yes, Vermont is probably the best place to go skiing on the East coast – but it’s also gorgeous and extremely livable in the summer. To that point, it does get pretty darn cold during the winter – usually there’s a week or two where we dip into the negative 20s. But the hottest days of the summer will scratch into the low 100s on occasion.

The biggest contradiction might be that Vermont gets a good chunk of its electricity from a nuclear plant called “Vermont Yankee.”

I know…you’re thinking: “liberal state” and “nuclear power” do not go together very well. And you’re right. It seems that Vermonters have been trying to close Vermont Yankee ever since it opened. Lately, the calls for its closure have grown much more shrill and frequent after a small amount of nuclear waste water *may* have leaked into the Connecticut River – the river that separates Vermont and New Hampshire, passes through the middle of Massachusetts and eventually outlets into the ocean on the Connecticut coast.

Shares of Uranium Resources Inc. (Nasdaq: URRE) are higher following news before the opening that the company engaged in developing and mining uranium properties has purchased a similar privately held firm.

Lewisville, Texas-based Uranium Resources, which owns uranium properties in Texas and New Mexico, has agreed to buy a uranium mining company and a mill license from BHP Billiton Ltd. (NYSE: BHP) for about $126.5 million in cash. The purchase price includes $110 million for Rio Algom Mining LLC, which has a property with 20 million pounds of U308 uranium ore in New Mexico, and $16.5 million paid to regulators for a license to build a conventional uranium mill.

“The purchase of Rio Algom provides one of the key assets we need to achieve our strategic goal to produce 10 million pounds of U3O8 per year by 2014,” said president and CEO Dave Clark in a statement. He added that production from the new mill could begin within four to five years.

The deal is expected to close before June 2008.

At 11:18 a.m. ET, shares of Uranium Resources (URRE) had advanced $0.84, or 9%, to $9.87. The 52-week high of $12.00 was reached on June 4. The 52-week low of $2.25 was set on Oct. 12.