Investing in food materials

P

paulj123

Guest
The price of wheat and basic food raw materials has gone thru the roof over the last six months after a number of years of benign food prices. Does anyone know how to invest in this area?
 
Do a forum search for the word 'commodities'. Loads of previous posts.
 
Pm me for some ETF's based in Softs that track these various indicies etc. You are right, wheat has spiked in the last twelve months but is still 25% of 1975 values. That is in real terms.
 
paulj123 said:
The price of wheat and basic food raw materials has gone thru the roof over the last six months after a number of years of benign food prices. Does anyone know how to invest in this area?
Click to expand...

Well firstly i would not be rushing in to invest in this area at the moment, the wheat price has more than doubled in one year. I think there is an awful lot of speculative money involved. Therefore any sign in the next year of good harvests could cause the price to drop equally as spectacularly. Australia while still in long term drought has had the first substantial rain in 5 years, so next years harvest could be alot better than this year's, also there has been record wheat plantings this year even in ireland you would notice this. Long term investments in food production would be a better bet. But even this area might be over bought currently as it is so hot at the moment. Maybe you should start reading the farmers journal, it has alot of stuff on agriculture worldwide and this week has a suplement on the trends in different areas of agriculture for the future.
 
joe sod said:
Well firstly i would not be rushing in to invest in this area at the moment, the wheat price has more than doubled in one year. I think there is an awful lot of speculative money involved. Therefore any sign in the next year of good harvests could cause the price to drop equally as spectacularly. Australia while still in long term drought has had the first substantial rain in 5 years, so next years harvest could be alot better than this year's, also there has been record wheat plantings this year even in ireland you would notice this. Long term investments in food production would be a better bet. But even this area might be over bought currently as it is so hot at the moment. Maybe you should start reading the farmers journal, it has alot of stuff on agriculture worldwide and this week has a suplement on the trends in different areas of agriculture for the future.
Click to expand...

Disagree entirely with most of your assertions. Worldwide inventories in all food stocks are now at record lows. Growing economies in Asia, primarily India and China are importing more and more Western style foods. Supply is being curtailed due to agric to oil being much more profitable to the farmer for the forseeable future. For example, America's bread basket, the Great Plains of Iowa have recently been provided with major subsidies for crop converted to oil production by the Bush government. These mad decisions are causing food shortages in Mexico for the tortilla etc. It flies in the face of common sense or rationale. Economically and financially speaking, agric to oil can only be described as a joke proposition and their administration know it. However, pay roll plus employment in the Farm sector are rising fast as is capital expenditure on plant & machinery, all because of this switch. The Mid West is a primary Republican stronghold -no surprise there.

Basic economics dictates when demand rises rapidly whilst supply of foodstuffs to eat gets tighter [global arable land is shrinking too] prices will rise. Exponentially as the two diverge from each other. In the last year prices have doubled but these are still 75% behind real price demands of 1975. So I would still expect a significant Bull Run within this sector during the whole of 2008.

If necesscary I can provide sources to this as background but the days of Butter Mountains in the EU are distant memories...
 
MichaelDes said:
Disagree entirely with most of your assertions. Worldwide inventories in all food stocks are at record lows. Growing economies in Asia, primarily India and China are importing more and more Western style foods. Supply is being curtailed because agric to oil is much more profitable to the farmer for the forseeable future. For example, the bread basket of America are the Great Plains of Iowa and the Bush government recently provided major subsidies for crop to oil productions. These decisions are causing food shortages in Mexico for the tortilla etc. It flies in the face of common sense or rationale. Economically and financially speaking, agric to oil can only be described as joke propositions and their administration know it. However, pay roll plus employment in the Farm sector are rising as is capital expenditure on plant & machinery, all because of this switch. The Mid West is a primary Republican stronghold -no surprise there.

So therefore basic economics will dictate that when demand is rising rapidly whilst supply of foodstuffs to eat is getting tighter [global arable land is shrinking too] prices will rise. Exponentially as the two diverge from each other. Prices have doubled in the last year but these are still 75% behind real price demands of 1975. So I would still expect a significant Bull Run within this sector during 2008.

If necesscary I can provide sources to this as background but the days of Butter Mountains in the EU are distant memories...
Click to expand...

I would Like to invest in the above area, do I just contact a broker(which one) and hand over the money?

Joejoe
 
CCOVICH said:
Why the need to keep this information private-please post it so that others who are interested may benefit.
Click to expand...

Is posting/recommending a particular ETF* frowned upon the same way*recommending a particular share is banned ?

(I was caught by this rule when I joined the AAM initially)
 
There is no Posting Guideline that forbids discussion of individual funds or ETFs.
 
CCOVICH said:
There is no Posting Guideline that forbids discussion of individual funds or ETFs.
Click to expand...

I thought there was a problem posting this type of information...

Google CF Eclectica Agricultural Fund or else look at Diapason Commodities Agricultural Index Fund or else the Diapason Global Biofuel Index fund. For ETF's Grains that track baskets such as corn, wheat etc look at [broken link removed] or try ishares go into ETF's. I hope this helps.
 
You must log in or register to reply here.
Back
Top