Agriculture Sector

[iam802]

i agree...~$27 should be a support...

on viewing weekly chart, there's now about a resistance....@ ~$28....

so, i thought, let's review its option chains.... wah da eh....atrociously thin... cant play this...

I have the same reaction after I posted the charts.

No meat. So....I guess...let's move back to TLT, SPY etc.

[winston]

DON'T FORGET ABOUT THIS COMMODITY TREND…

With gold and silver reaching new highs almost daily, precious metals are getting all of the "commodity press" lately… and folks are going wild to own the stuff.

But today's chart says, "Don't forget about the ag complex."

We like to track and trade agricultural commodities like corn, soybeans, and wheat because they are one of the favorite investment ideas of legendary contrarian investors Marc Faber and Jim Rogers.

Like most assets, the "ags" were clobbered in the 2008 credit crisis… and they generally traded sideways from early 2009 to mid-2010. But as today's chart shows, this sector is moving higher.

Below is a chart of the DBA fund. It's a one-click way to own a basket of ag assets like grains, coffee, and livestock. As you can see, DBA is breaking out of a huge sideways trading pattern that began two years ago.

Lackluster grain harvests and growing demand from Asia are driving the uptrend. It's bullish action for these "guru approved" commodities.


www.dailywealth.com

[winston]

Not vested

THIS "GURU-APPROVED" ASSET IS SOARING

The "food rally" we've been highlighting for the past year is in full bloom. Just ask the "DBA."

DBA is the symbol of the popular investment fund that allows investors a "one-click" way to take a position in vital agricultural commodities, like corn, soybeans, wheat, sugar, cattle, hogs, and coffee.

We keep an eye on this fund because "ag" is a favorite idea of super investors, like Marc Faber and Jim Rogers.

The bull case here is the same as most commodity sectors. Growing demand from Asian markets like China and India will keep a long-term tailwind at the sector's back.

As you can see from today's chart, this potential tailwind is howling right now. After spending much of the past year in the dumps, the DBA has climbed 28% since July… and just reached a fresh 12-month high. The trend is up for this "guru-approved" basket of commodities.


www.dailywealth.com

[winston]

THIS "GURU-APPROVED" FOOD ASSET IS SOARING

Our chart shows the past two years of trading in the big agriculture fund (DBA). This fund is a "one click" way to own a diversified basket of agricultural commodities like corn, wheat, soybeans, cattle, hogs, sugar, and coffee. It's one of the best safe plays on an "ag boom."

We call this idea "guru approved" because it's a favorite investment idea of legendary contrarian investors Marc Faber and Jim Rogers.

Like most assets, the "ags" were clobbered in the 2008 credit crisis… and they generally traded sideways from early 2009 to mid-2010.

But as we highlighted, the DBA broke out to a new 52-week high in October. This breakout has turned into a rip-roaring bull run. And while the DBA is due for a short-term breather, this bull run will last for a long time.


www.dailywealth.com

[winston]

How the Food Crisis Will Affect Your Portfolio in 2011
By Chris Mayer, editor, Capital & Crisis


A story I've been warning about for years is making sensational headlines right now.

It's a story most people don't realize could make a huge impact on all of our portfolios in a number of ways.

"U.S. Crop Stock Forecasts Deepen Fears of Food Crisis" read a recent Financial Times headline. The U.S. government cut its estimate for key crops. This came only a week after the U.N. warned the world faces "food price shock." Corn and soybean prices jumped and now sit at 30-month highs. Inventories are very tight. Corn is up 94% since June!

And the world worries about a repeat of 2008, when food riots erupted in poor countries around the world.

This has been in the works for a long time. It was there for all to see. The ratio of arable land to people has been falling for decades. Gains in crop yields have slowed. Population has expanded and income levels have grown. Diets have shifted. More people are eating more meat, which is much more grain-intensive to produce.

And the love affair with biofuels puts food production in direct competition with energy. Plus, there are water scarcity issues affecting food supply. My readers have made tremendous gains from this trend by owning shares of agricultural fertilizer producers Potash (POT) and Mosaic (MOS).

I should also make the point that this fits in with another topic I'm concerned about: inflation. Now, the man on the street uses the term "inflation" to mean when prices for everything seem to go up.

Or put another way, inflation is when the dollars in his pocket buy less. In truth, this is the effect of inflation. The root cause is simply money printing. When you print more money, that money has less value than if you didn't print any new money at all.

So what we are seeing with rising commodity prices is not only the supply and demand story I led off with. It's also the effect of paper money losing its purchasing power in the real world of things. This, too, was easy enough to see. Finally, all that money printing – the "quantitative easing" baloney you've heard about – is coming home to roost.

Still, it's disconcerting to see it all playing out. For the sake of our world, I'd rather have gotten this one wrong. But we have to deal with the market we are in. So what might "Food Crisis II" mean from an investment point of view?

Food prices will have to rise: There is no way around this. We are all going to pay more for food. Wells Fargo predicts U.S. retail food prices will rise about 4% this year. Some things will go up much more. Pork and beef could rise more than 10%.

This won't necessarily mean that meat producer stocks are good buys, because they may not get to raise prices to fully offset the rise in feed costs. Anecdotally, for instance, The Wall Street Journal cited a Minnesota 300-cow operation that reported feed costs had doubled. Plus, I've listened in to the conference calls of a number of food producers – Tyson, Hormel, and Sanderson Farms. They all talk about getting squeezed by rising feed costs.

I do think these companies will be good buys sometime this year, because people will adapt and farmers will respond. Producers won't produce meat at a loss for long. And farmers will bring every resource they have to bear. It's been slow getting the crops in the ground so far in many places. But ultimately, there is a lot of potential supply from Brazil and the U.S.

Still, weather is the big wild card here. If we have a drought in the U.S. or in Brazil, this could really get ugly.

Emerging markets are vulnerable: This follows from the above. It doesn't really faze the typical American to have to pay 4% more at the grocery store. Food is still such a small part of the typical American's budget. I think Michael Pollan in The Omnivore's Dilemma points out that the U.S. spends 9% of its income on food, which is among the lowest percentage of any people anywhere at any time in history.

The same is not true in India or China or many emerging markets . In China, people spend 50% of every incremental dollar on food. And in India, it's more like 70%. So the rising price of food is felt more keenly in these markets.

The price of food is rising faster in emerging markets, too. In India, food prices are up 18% and at their highest level in a year. China has the same problem. Prices rose 5% in November alone. All around the world, emerging markets have a big problem with rising food prices. Indonesia's president is trying to get people to grow their own chili peppers. And the South Korean government recently released emergency stores of cabbage, pork, mackerel, radish, and other staples. I could go on and on.

The point is that the emerging markets boom is not going to go far when it faces a food crisis. Already, the markets are starting to reflect this. India's Sensex was down three straight days and off 6% to start the year. Other markets also started badly. And if China and India and the rest slow down, it's going to have a huge impact on all those stocks and commodities most sensitive to emerging market growth.

I'm keeping a close eye on these developments. There will be opportunities in this crisis, as with all others. For instance, though rising grain prices are not good for meat producers or emerging markets right now, it's a boon for fertilizer stocks. As the old golf saying goes, "Every putt makes somebody happy."


Source: Daily Wealth

[winston]

China farmers to get $15 bn subsidies amid drought

China says it had earmarked about $15 billion in subsidies for millions of farmers who have been hit by a severe drought that has driven prices as the government tries to battle inflation.

The dry spell in the north and south has affected about four million hectares (9.9 million acres), official figures show, and has been blamed for destroying crops.

Farmers will receive 98.6 billion yuan, up 14 percent from a year earlier, to boost their incomes and reduce the cost of diesel, fertiliser and pesticides, the finance ministry said on its website late Thursday.

Local authorities have been ordered to distribute the money before farmers start planting their crops in the spring, it said.

Beijing has been trying to rein in soaring food prices, which have driven up inflation and strained household budgets.

The consumer price index, the main gauge of inflation, slowed in December from the previous month but analysts expect it to pick up again this month due to increased consumer spending for the Lunar New Year and cold temperatures.

The index rose 4.6 percent on year in December, down from a two-year high 5.1 percent in November, but it was up 3.3 percent over the year, higher than Beijing's target.

Source: AFP Asian Edition

[winston]

The Global Food Crisis Is Upon Us

The global food crisis is upon us...

Riots over milk and flour killed three people and injured 420 in Algeria this month.

On January 10, the Serbian government said it's considering an export tax on wheat to discourage shipments.

India halted onion exports in December after prices more than doubled.

Global food prices jumped 25% last year to an all-time high in December. While we haven't yet experienced food shortages in the U.S., they could be coming.

According to the USDA, higher prices will boost U.S. agricultural exports 16% to a record $126.5 billion this year. Already, major grocery chains are planning price increases.


Source: growthstockwire.com

[winston]

The world population did not drop in 2008 so how come the shares of fertilizer companies collapsed at that time ?

An Update on One of My Favorite "Boom and Bust" Sectors By Frank Curzio

The world is running out of food.

I know... That sounds crazy to someone living in the U.S. Our supermarkets are always packed with meats, eggs, and vegetables. And we have one of the highest obesity rates in the world.

But the trend is clear when we take a look at what's happening in places like Egypt, Haiti, and Cameroon. Families in these countries are now paying 35%-40% of their monthly income on food.

In China and India, sugar and meat prices are near all-time highs due to rising populations and lack of supply. Prices for corn and rice are at their highest levels since the 2008 food crisis.

Below is a chart of the Food Price Index from the Food and Agricultural Organization (FAO). The Food Price index measures the monthly change in international prices based on a basket of food commodities.

As you can see, food prices are up an average of 50% since 2009.

Some industry experts believe this is an anomaly. After all, if we just plant more seeds and have good weather, we'll see more supply come online. That would help ease prices and ultimately cure the world's food shortage.

But the math tells a different story.

You see, according to the United Nations, the world's population is expected to grow 35% over the next 40 years. To put this in perspective, that's about 2.5 billion more people than we have living on Earth today. It's the equivalent of another two Chinas. Imagine how much food it would take to feed another two Chinas.

( Winston: Do you believe that the "experts" that can really predict 40 years into the future ?

And that's just half the problem. These people will need a place to live. That means more industrialization. Most of these homes, power plants, and schools will be built on areas where crops are produced today. The only solution to our food crisis comes from fertilizer companies.

( Only Solution ? )

Fertilizer increases production from existing crops. In other words, it helps increase the size and improve overall quality in fruits and vegetables. In farmer's lingo, this is called an increase in crop yields.

That's the reason why Potash, Monsanto, and almost every other fertilizer company is trading at 52-week highs. These stocks have been some of the best market performers over the past eight months.

That's also why I suggested buying Potash below $120 in March. Potash prices were trending higher. Inventory levels declined for five straight months. Yet, demand for potash was stronger than ever.

All these factors pushed Potash shares up 35% since then. All those factors still exist today. And I believe shares will push past the $200 level in the short-term.

Here's the thing: It might sound like a boring business to produce the stuff that makes crops grow. But it's difficult to find a more "boom and bust" sector anywhere in the market. On any given week, shares of a fertilizer company can rise 5% to 10%.

So if you're looking to get into this sector, be patient. The stocks are extremely volatile. In fact, after my recommendation of Potash, shares fell more than 15% over the next few months – before surging higher.

I suggest using any pullback in the fertilizer sector as a buying opportunity. I can't think of another sector that has a stronger long-term trend.

http://www.growthstockwire.com/2633/An- ... st-Sectors

[winston]

THE AG COMPLEX HAS EXPLODED

Today's chart is an update on one of our favorite "guru-approved" trends we've talked about for the past several years. It's also an update on why folks around the world are rioting in the streets…

Our chart displays the extraordinary rise in the price of basic agricultural commodities, as represented by DBA. This fund is a "one click" way to own a basket of agricultural commodities like corn, wheat, soybeans, sugar, and livestock.

Like most assets, the "ags" were clobbered in the 2008 credit crisis… and they generally traded sideways from early 2009 to mid-2010. As we noted back in October, DBA make a major upside breakout to clear this sideways pattern. Since that breakout, tight supplies and rising demand have sent this fund skyrocketing to $35 per share.

This move is producing major gains for companies like our "farm income through the stock market" fertilizer producer Mosaic (MOS). It's also driving up the cost of basic foodstuffs around the world… which leads to riots in poorer countries. The situation is great for resource investors, but bad for oppressive dictators.


www.dailywealth.com

[winston]

Food crisis fears rise with commodities

CNN) -- In Shandong Province in northeastern China, the nation's grain heartland, the worst drought in 60 years has raised the specter of shortages for the world's largest wheat producer.

Russia -- still reeling from a drought that slashed wheat harvest by nearly 40% and spurred Moscow to ban exports last summer -- hopes new, resilient strains of the crop will lead to a resumption of wheat exports. However, soil damaged by the drought means nearly 10% of Russian wheat fields couldn't be planted this year.

Rising food prices have driven nearly 44 million people into poverty since June, according to World Bank estimates released this week, pushing the number of chronically hungry toward 1 billion.

Global food prices rose 29% in the past year due to weather shocks such as the Russian drought and subsequent export ban, as well as the growing appetite for biofuels and rising demand from emerging economies such as Brazil, India and China.

Price increases were led by sugar and wheat, at 20%. Fats and oils used in cooking rose 22%, according to the World Bank.

"Our research shows higher global wheat prices have directly fed into sharp increases in domestic wheat prices in many countries," Robert Zoellick, president of the World Bank, said earlier this week. "In just six months, prices for wheat rose by more than 50% in Kyrgyzstan; 45% in Bangladesh and 33% in Mongolia."

The price of a kilogram of onions in India nearly doubled from September to December, resulting in an export ban that was lifted this week after Indian farmers protested and onion prices plummeted. Chinese food prices rose 10.3% in January, raising concerns about the economy overheating.


http://edition.cnn.com/2011/BUSINESS/02 ... index.html