Best of the Week
Most Popular
1. US Housing Market House Prices Bull Market Trend Current State - Nadeem_Walayat
2.Gold and Silver End of Week Technical, CoT and Fundamental Status - Gary_Tanashian
3.Stock Market Dow Trend Forecast - April Update - Nadeem_Walayat
4.When Will the Stock Market’s Rally Stop? - Troy_Bombardia
5.Russia and China Intend to Drain the West of Its Gold - MoneyMetals
6.BAIDU (BIDU) - Top 10 Artificial Intelligence Stocks Investing To Profit from AI Mega-trend - Nadeem_Walayat
7.Stop Feeding the Chinese Empire - ‘Belt and Road’ Trojan Horse - Richard_Mills
8.Stock Market US China Trade War Panic! Trend Forecast May 2019 Update - Nadeem_Walayat
9.US China Trade Impasse Threatens US Lithium, Rare Earth Imports - Richard_Mills
10.How to Invest in AI Stocks to Profit from the Machine Intelligence Mega-trend - Nadeem_Walayat
Last 7 days
China Hang Seng Stocks Index Collapses and Commodities - 24th May 19
Costco Corp. (COST): Finding Opportunity in Five Minutes or Less - 24th May 19
How Free Bets Have Impacted the Online Casino Industry - 24th May 19
This Ultimate Formula Will Help You Avoid Dividend Cutting Stocks - 24th May 19
Benefits of a Lottery Online Account - 24th May 19
Technical Analyst: Gold Price Weakness Should Be Short Term - 24th May 19
Silver Price Looking Weaker than Gold - 24th May 19
Nigel Farage's Brexit Party EU Elections Seats Results Forecast - 24th May 19
Powerful Signal from Gold GDX - 24th May 19
Eye Opening Currency Charts – Why Precious Metals Are Falling - 23rd May 19
Netflix Has 175 Days Left to Pull Off a Miracle… or It’s All Over - 23rd May 19
Capitalism Works, Ravenous Capitalism Doesn’t - 23rd May 19
The Euro Is Bidding Its Time: A Reversal at Hand? - 23rd May 19
Gold Demand Rose 7% in Q1 2019. A Launching Pad Higher for Gold? - 23rd May 19
Global Economic Tensions Translate Into Oil Price Volatility - 22nd May 19
The Coming Pension Crisis Is So Big That It’s a Problem for Everyone - 22nd May 19
Crude Oil, Hot Stocks, and Currencies – Markets III - 22nd May 19
The No.1 Energy Stock for 2019 - 22nd May 19
Brexit Party and Lib-Dems Pull Further Away from Labour and Tories in Latest Opinion Polls - 22nd May 19
The Deep State vs Donald Trump - US vs Them Part 2 - 21st May 19
Deep State & Financial Powers Worry about Alternative Currencies - 21st May 19
Gold’s Exciting Boredom - 21st May 19
Trade War Fears Again, Will Stocks Resume the Downtrend? - 21st May 19
Buffett Mistake Costs Him $4.3 Billion This Year—Here’s What Every Investor Can Learn from It - 21st May 19
Dow Stock Market Trend Forecast 2019 May Update - Video - 20th May 19
A Brief History of Financial Entropy - 20th May 19
Gold, MMT, Fiat Money Inflation In France - 20th May 19
WAR - Us versus Them Narrative - 20th May 19
US - Iran War Safe-haven Reasons to Own Gold - 20th May 19
How long does Google have to reference a website? - 20th May 19
Tory Leadership Contest - Will Michael Gove Stab Boris Johnson in the Back Again? - 19th May 19
Stock Market Counter-trend Rally - 19th May 19
Will Stock Market “Sell in May, Go Away” Lead to a Correction… or a Crash? - 19th May 19
US vs. Global Stocks Sector Rotation – What Next? Part 1 - 19th May 19
BrExit Party EarthQuake Could Win it 150 MP's at Next UK General Election! - 18th May 19
Dow Stock Market Trend Forecast 2019 May Update - 18th May 19
US Economy to Die a Traditional Death… Inflation Is Going to Move Higher - 18th May 19
Trump’s Trade War Is Good for These 3 Dividend Stocks - 18th May 19
GDX Gold Mining Stocks Fundamentals Update - 17th May 19
Stock Markets Rally Hard – Is The Volatility Move Over? - 17th May 19
The Use of Technical Analysis for Forex Traders - 17th May 19
Brexit Party Set to Storm EU Parliament Elections - Seats Forecast - 17th May 19
Is the Trade War a Catalyst for Gold? - 17th May 19
This Is a Recession Indicator No One Is Talking About—and It’s Flashing Red - 17th May 19
War! Good or Bad for Stocks? - 17th May 19
How Many Seats Will Brexit Party Win - EU Parliament Elections Forecast 2019 - 16th May 19

Market Oracle FREE Newsletter

U.S. House Prices Analysis and Trend Forecast 2019 to 2021

Agri-Commodities Winning in 2016

Commodities / Agricultural Commodities Jun 09, 2016 - 01:51 PM GMT

By: Ned_W_Schmidt

Commodities

The inevitable just seems to keep coming around. That over time food would become scarcer in our world has been well known for decades. Simply put, global demand for food continues to expand. Inevitable scarcity of food for the world is occasionally hidden by short-term bursts of exceptionally good harvests. But, exceptionally good is not a normal state for world's Agri-Food production.


2016 Agri-Food Prices

Above chart is the 2016 year-to-date percentage price change for each of 18 Agri-Commodities valued in U.S. dollars. For much of the past year farmers have suffering financially from inadequate prices for their production. In 2016, that situation is apparently changing. Simply put, a stash of soybeans or sugar in the bowl on your table have outperformed equity markets. As can be observed in the lower part of chart, the average(mean) gain thus far is almost ten percent.

A number of Agri-Commodities have recently hit new 52-week highs. US cash corn joined that elite club yesterday. These higher prices are being driven by growing demand and inadequate production. Soybean prices are a good example of this situation. USDA estimates that the U.S. will only have 28 days of consumption in reserves at end of 2017 crop year, 31 August 2017. (Note: Using crop years, not calendar years.)

Agri-commodities
Recent
New 52-week Highs

US Cash Corn
US Cash Soybeans
US$ Cotton
US$ World Sugar
US$ Pork

US Major Grains, Exported, to Expor, Total

Expanding global demand for Agri-Commodities is now evident in U.S. grain exports. In above chart are plotted year-to-year percentage changes for U.S. major grain exports. Green bars are current value while red bars are for four months ago. Middle set of bars, To Export, are export sales made but not yet exported. Four months ago those export sales were down 20% from previous year. More recently those export sales were up 25%. That is clear evidence of stronger global demand and the benefits of a depreciating dollar.

World Grains 2017, Consume % to Produce

In bottom chart is plotted consumption as a percent of production for the three major grain groups. Starting from left is course grains, basically all grains except oilseeds and rice, oilseeds, largely soybeans, and rice. As both are over 100%, world will consume more than that produced for both course grains and oilseeds in the coming crop year. If world consumes more than it produces, prices will rise. Note that in this data we use crop years, rather than calendar years. 2017 crop year starts June-September and ends in May-August 2017.

Situation in Agri-Commodities has already benefitted investors thus far this year, and is likely to continue to do so. Tier One Agri-Equities are up roughly11% thus far in 2016. That return compares quite favorable to small positive return for S&P 500 and NASDAQ Composite being down.

By Ned W Schmidt CFA, CEBS

Ned W. Schmidt,CFA has had for decades a mission to save investors from the regular financial crises created by economists and politicians. He is publisher of The Value View Gold Report, monthly, with companion Trading Thoughts. To receive these reports, go to: www.valueviewgoldreport.com Follow us @vvgoldreport

Copyright © 2016 Ned W. Schmidt - All Rights Reserved

Ned W Schmidt Archive

© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules