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 Rising Meat Prices

Imbalances in supply and demand continue to take its toll on food prices as the price of meat continues to rise, giving positive support to the PowerShares DB Agriculture Fund (DBA), the iPath Dow Jones-UBS Livestock Subindex Total Return ETN (COW), the Market Vectors Agribusiness (MOO) and the PowerShares Global Agriculture Portfolio (PAGG).

According to the United Nation’s Food and Agriculture Organization’s meat index, beef and sheep prices are at an all time high and poultry and pig meat costs are on the rise. On the demand side, demand in much of the developed world like the US remains intact, while demand in the developing world for meat continues to rise.  According to the US Department of Agriculture, demand in Asia, in particularly South Korea, Hong Kong and China continues to rise.  Furthermore, demand is expected to remain elevated in the near-term future as disposable income in developing nations continues to increase. Read more of this post

Four ETFs Likely To Be Impacted By US Corn Production

According to the latest data reported by the U.S. Department of Agriculture, U.S. farmers are expected to increase corn production, which could potentially influence the Teucrium Corn ETF (CORN), PowerShares DB Agriculture Fund (DBA), Market Vectors Agribusiness (MOO) and PowerShares Global Agriculture (PAGG).

Major imbalances in supply and demand have pushed agriculturally-based commodity prices such as corn, wheat and cattle through the roof.  Inclimate weather around the world has taken its toll on production, while increasing purchasing power in developing nations, coupled with growing populations around the world, has pushed up demand.  In fact, the USDA reported earlier this year that corn reserves were at a 15 year low.  Corn is a vital commodity due its uses in packaged foods and its importance in livestock production. Corn is often used by farmers and ranchers to fatten up their herds of cattle and chicken to produce more meat, eggs and milk.  Read more of this post

Three ETFs Impacted By Food Prices

The world food index tracked by the United Nations rose to an all time high in February, indicating that food prices continue to rise and are likely to remain elevated in the near term future, providing positive price support to the PowerShares DB Agriculture Fund (DBA), UBS E-TRACS CMCI Food TR ETN (FUD) and the Market Vectors Agribusiness ETF (MOO).

The underlying force behind this price surge is an imbalance is supply and demand, which is likely to prevail for many years to come.  On the demand side, the United Nation’s Food and Agriculture Organization estimates the world population to swelter to 9 billion over the next 40 years pushing organic demand for food up.  Furthermore, consumers in developing nations are witnessing increasing purchasing power and a widening middle class giving them the ability to consume more meat, dairy and grains than ever before.  As for the future of these nations, the International Monetary Fund expects emerging markets to continue to be at the forefront of economic growth, therefore supporting demand for livestock, dairy and grains. 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

Four ETFs To Play Ethanol

As governments continue to place an emphasis on renewable energy, many suggest that the future prospects for corn and sugar cane-based ethanol is promising giving support to the Teucrium CORN (CORN), PowerShares Global Agriculture (PAGG), Market Vectors Agribusiness (MOO), and ELEMENTS MLCX Biofuels ETN (FUE).

In Brazil, the main source of fuel in automobiles is already ethanol as most of the nation’s vehicles used for transportation can either run solely on ethanol or utilize a flex-fuel system which uses a mix of gasoline and ethanol.  The success of Brazil’s use of ethanol has many other nations looking at it as a viable power source.  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