Three ETFs To Play Rising Rice Prices

Poor weather conditions around the world may result in a supply shock, pushing rice, grain and other agricultural-based commodities higher and giving positive price support to the ELEMENTS Rogers Intl Commodity Agri ETN (RJA),  the PowerShares DB Agriculture Fund (DBA) and the iPath DJ-UBS Agriculture TR Sub-Idx ETN (JJA).

According to the UN Food and Agriculture Organization, Thailand witnessed the its worst flooding in more than 50 years resulting in nearly 13 percent of the nation’s rice crop to be destroyed.  This is vital to global supply as that Thailand accounts for more than 30 percent of global rice exports.  Read more of this post

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Four ETFs To Cash In On Rising Food Prices

Supply shocks over the past two years in wheat and corn continue to take their toll on food prices, which will likely provide positive price support to the iPath Dow Jones-UBS Agriculture Subindex Total Return ETN (JJA ), iPath Dow Jones-UBS Grains Subindex Total Return ETN (JJG),  (DBA), UBS E-TRACS CMCI Food T ETN (FUD) and Market Vectors Agribusiness ETF (MOO).

On the production side, both wheat and corn have taken a major hit over the past couple of years as natural disasters and crop disease have plagued some of the major producing parts of the world.  Russia, for example, witnessed a severe drought over the past few years which has curtailed production of wheat, forcing the Kremlin to halt exporting the commodity to ensure that domestic supply can meet domestic demand.  Similarly, the current drought in Texas is starting to take its toll on corn production keeping prices of corn elevated.  In fact, the Agriculture Department expects a national average corn yield in the US of 153 bushels per acre, nearly 4% lower than its earlier forecasts.  Read more of this post

4 ETFs To Play Coffee’s Jump

Continuing imbalances in supply and demand have pushed coffee prices to 30-year highs and are expected to continue to provide positive price support to the soft commodity. 

Over the past year, coffee prices have nearly doubled as production has suffered due to weather conditions in Colombia and parts of Africa.  In Colombia, storms seen last year damaged harvests curtailing production by as much as 10 percent in the current quarter.  To put it into perspective, output in April from Colombian coffee producers declined by 19 percent from a year earlier. Read more of this post

Four ETFs Impacted By Increasing Food Prices

The global price of food continues to increase illustrated by the United Nations Food and Agriculture Organization’s monthly food price index rising to 214.7, the sixth consecutive month that the index has risen as supply and demand  imbalances continue to take their toll on food prices. 

Demand for food continues to rise as wealth in developing nation like China, India and Brazil has elevated food consumption as consumers in these nations starve of their traditional eating habits and seek more of a Western-style diet. This elevated demand, combined with supply constraints, has provided positive price support to commodities like corn, wheat, coffee and cotton and cooking oils. Read more of this post

Three ETFs To Avoid Increased Margin Requirements on Commodities

On Wednesday, the CME group raised margin requirements on trading soybeans futures contracts, shortly after the Chicago exchange increased margin requirements to curb silver and cotton trading, further boosting the appeal of exchange traded funds (ETFs) which enable investors to gain exposure to these commodities.

Margin requirements are the minimum deposit, or cash, that a trader is required to put with up an exchange to cover inherent risks involved with trading commodities.  When compared to stocks, in general, commodities are traded in margin accounts, where traders has the ability to control contracts with values a lot more than what they have in accounts. Read more of this post

Four ETFs To Play Global Food Demand

Agriculture prices have surged this year as demand for grains, dairy, meats and cooking oils have elevated in emerging markets and supply has remained constrained enabling the Market Vectors Agribusiness ETF (MOO), UBS E-TRACS CMCI Food TR ETN (FUD), iPath DJ-UBS Agriculture TR Sub-Idx ETN (JJA) and the PowerShares DB Agriculture Fund (DBA) to reap the benefits. 

On the demand side, increased wealth in nations like China, India and Brazil has elevated food consumption as consumers in these nations starve of their traditional eating habits and seek more of a Western-style diet.  This elevated demand, combined with supply constraints, has already driven up the prices in commodities like corn, wheat, coffee and cotton and now is aiming to hit cooking oils. Read more of this post

Three ETFs To Play Coffee’s Supply Concerns

Heavy rainfall have many concerned about coffee supplies, pushing the agriculturally-based commodity to its highest levels in more than 13 years giving positive price support to the iPath DJ-UBS Coffee TR Sub-Idx (JO), the PowerShares DB Agriculture Fund (DBA) and the iPath DJ-UBS Agriculture TR Sub-Idx ETN (JJA).

Coffee futures for December delivery recently broke $2 per pound as a string of storms in the Caribbean dumped huge amounts of rain over South and Central America resulting in lower crop yields and destruction of the quality of existing coffee beans.  This shortage in coffee beans, more specifically Arabica beans, is causing many to shore up on stockpiles to meet demand. Read more of this post