I wrote a column about rising global demand for agricultural products in today’s Uncommon Wisdom Daily. You can read it here:
Here are three more stories …
Global Wheat Supplies Will Slide by End of June on Drought, Council Says
World wheat stockpiles will decline by the end of June as drought damages crops in Russia and Kazakhstan, the International Grains Council said, slashing an outlook for higher inventories.
Stocks will drop to 192 million metric tons at the end of the 2010-11 crop year from 197 million tons at last month’s close, the London-based council said in a monthly report today. The group cut its outlook for this year’s wheat harvest.
Food for Thought on Agricultural Stocks
Will agriculture prove the hot new sector of the 21st century?
With an estimated 9.2 billion mouths to feed by 2050, up from 6.8 billion now, and growing demand from wealthier emerging-market consumers for a high-protein diet, the challenge of feeding the world looks daunting. In theory, that should provide a huge secular boost to agribusiness stocks over the coming years. But it will still require investors to have an appetite for risk.
Growing demand for food isn’t in doubt. In 2008, there were already 915 million undernourished people around the globe, according to the United Nations’ Food and Agriculture Organization. Prices for basic crops like maize, rice and wheat soared between 2006 and 2008, reaching their highest levels in 30 years and triggering riots in some countries. Prices have since fallen back as a result of the financial crisis, but the focus is firmly on food security.
Drought Overseas Boosts U.S. Wheat Export Sales, Prices
U.S. wheat export sales were double what some analysts had forecast, yet another sign that global supplies are tightening.
Growers in the U.S., the world’s biggest exporter, last week struck deals to export 919,900 tons of the golden grain, according to the latest data issued Thursday by the U.S. Department of Agriculture. That topped estimates ranging from 250,000 to 450,000 tons.
Related Posts
- It’s Thansksgiving … Let’s Look at Agriculture ETFs (11/26/09)
- Is Agriculture The Last Bargain? (10/23/09)
- Is Agriculture Ready for Its Next Run? (11/11/09)
- Russia’s Grain Crisis Sends Wheat Limit Up (08/05/10)
- As US Harvests Rise, China Demand Is Insatiable (02/19/10)
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Sean, you recommend RJA in your Crisis Profit Hunter Service; why are you recommending DBA in you “Big Gains in Grains” piece instead of RJA?
Hi, Steve.
DBA has plenty of volume, so it won’t be pushed around if everyone who reads Uncommon Wisdom Daily decides to buy it. RJA is a lower-volume issue, so it can get pushed around, especially by the large subscriber base associated with a free publication like Uncommon Wisdom Daily.
Meanwhile, Crisis Profit Hunter has a small subscriber base, so RJA is a good fit for it.
RJA has been performing very well lately and I like it a lot. In fact, I like it more than DBA. If you look, you’ll see that RJA is outperforming DBA today. DBA is still a good investment — I like it a lot, too. There is no one perfect way to play this market.
Thanks, Sean
Thanks, Sean. That makes sense.
Oops, one more question: Does RJA track only the Agriculture sub-index of the RICI Total Return Index? Or Does RJA provide exposure to energy and metals, too. As far as I can tell by researching on line, it seems like its only agricultural commodities and not the latter.