Best of the Week
Most Popular
1. Stock Markets and the History Chart of the End of the World (With Presidential Cycles) - 28th Aug 20
2.Google, Apple, Amazon, Facebook... AI Tech Stocks Buying Levels and Valuations Q3 2020 - 31st Aug 20
3.The Inflation Mega-trend is Going Hyper! - 11th Sep 20
4.Is this the End of Capitalism? - 13th Sep 20
5.What's Driving Gold, Silver and What's Next? - 3rd Sep 20
6.QE4EVER! - 9th Sep 20
7.Gold Price Trend Forecast Analysis - Part1 - 7th Sep 20
8.The Fed May “Cause” The Next Stock Market Crash - 3rd Sep 20
9.Bitcoin Price Crash - You Will be Suprised What Happens Next - 7th Sep 20
10.NVIDIA Stock Price Soars on RTX 3000 Cornering the GPU Market for next 2 years! - 3rd Sep 20
Last 7 days
US Housing Market House Prices Momentum Analysis - 26th Feb 21
FOMC Minutes Disappoint Gold Bulls - 26th Feb 21
Kiss of Life for Gold - 26th Feb 21
Congress May Increase The Moral Hazard Building In The Stock Market - 26th Feb 21
The “Oil Of The Future” Is Set To Soar In 2021 - 26th Feb 21
The Everything Stock Market Rally Continues - 25th Feb 21
Vaccine inequality: A new beginning or another missed opportunity? - 25th Feb 21
What's Next Move For Silver, Gold? Follow US Treasuries and Commodities To Find Out - 25th Feb 21
Warren Buffett Buys a Copper Stock! - 25th Feb 21
Work From Home Inflationary US House Prices BOOM! - 25th Feb 21
Man Takes First Steps Towards Colonising Mars - Nasa Perseverance Rover in Jezero Crater - 25th Feb 21
Musk, Bezos And Cook Are Rushing To Lock In New Lithium Supply - 25th Feb 21
US Debt and Yield Curve (Spread between 2 year and 10 year US bonds) - 24th Feb 21
Should You Buy a Landrover Discovery Sport in 2021? - 24th Feb 21
US Housing Market 2021 and the Inflation Mega-trend - QE4EVER! - 24th Feb 21
M&A Most Commonly Used Software - 24th Feb 21
Is More Stock Market Correction Needed? - 24th Feb 21
VUZE XR Camera 180 3D VR Example Footage Video Image quality - 24th Feb 21
How to Protect Your Positions From A Stock Market Sell-Off Using Options - 24th Feb 21
Why Isn’t Retail Demand for Silver Pushing Up Prices? - 24th Feb 21
2 Stocks That Could Win Big In The Trillion Dollar Battery War - 24th Feb 21
US Economic Trends - GDP, Inflation and Unemployment Impact on House Prices 2021 - 23rd Feb 21
Why the Sky Is Not Falling in Precious Metals - 23rd Feb 21
7 Things Every Businessman Should Know - 23rd Feb 21
For Stocks, has the “Rational Bubble” Popped? - 23rd Feb 21
Will Biden Overheat the Economy and Gold? - 23rd Feb 21
Precious Metals Under Seige? - 23rd Feb 21
US House Prices Trend Forecast Review - 23rd Feb 21
Lithium Prices Soar As Tesla, Apple And Google Fight For Supply - 23rd Feb 21
Stock Markets Discounting Post Covid Economic Boom - 22nd Feb 21
Economics Is Why Vaccination Is So Hard - 22nd Feb 21
Pivotal Session In Stocks Bull Bear Battle - 22nd Feb 21
Gold’s Downtrend: Is This Just the Beginning? - 22nd Feb 21
The Most Exciting Commodities Play Of 2021? - 22nd Feb 21
How to Test NEW and Used GPU, and Benchmark to Make sure it is Working Properly - 22nd Feb 21
US House Prices Vaccinations Indicator - 21st Feb 21
S&P 500 Correction – No Need to Hold Onto Your Hat - 21st Feb 21
Gold Setting Up Major Bottom So Could We See A Breakout Rally Begin Soon? - 21st Feb 21
Owning Real Assets Amid Surreal Financial Markets - 21st Feb 21
Great Investment Ideas For 2021 - 21st Feb 21
US House Prices Momentum Analysis - 20th Feb 21
The Most Important Chart in Housing Right Now - 20th Feb 21
Gold Is the Ultimate Reserve Asset - 20th Feb 21
Is That the S&P 500 And Gold Correction Finally? - 20th Feb 21
Technical Analysis of EUR/USD - 20th Feb 21
The Stock Market Big Picture - 19th Feb 21
Could Silver "Do a Palladium"? - 19th Feb 21
Three More Reasons We Love To Trade Options! - 19th Feb 21
Here’s What’s Eating Away at Gold - 19th Feb 21
Stock Market March Melt-Up Madness - 19th Feb 21
Land Rover Discovery Sport Extreme Ice and Snow vs Windscreen Wipers Test - 19th Feb 21
Real Reason Why Black and Asian BAME are NOT Getting Vaccinated - NHS Covid-19 Vaccinations - 19th Feb 21
New BNPL Regulations Leave Zilch Leading the Way - 19th Feb 21
Work From Home Inflationary House Prices BOOM! - 18th Feb 21
Why This "Excellent" Stock Market Indicator Should Be on Your Radar Screen Now - 18th Feb 21
The Commodity Cycle - 18th Feb 21
Silver Backwardation and Other Evidence of a Silver Supply Squeeze - 18th Feb 21
Why I’m Avoiding These “Bottle Rocket” Stocks Like GameStop - 18th Feb 21
S&P 500 Correction Delayed Again While Silver Runs - 18th Feb 21
Silver Prices Are About to Explode as Stars are Lining up Like Never Before! - 18th Feb 21
Cannabis, Alternative Agra, Mushrooms, and Cryptos – Everything ALT is HOT - 18th Feb 21
Crypto Mining Craze, How We Mined 6 Bitcoins with a PS4 Gaming Console - 18th Feb 21
Stock Market Trend Forecasts Analysis Review - 17th Feb 21
Vaccine Nationalism Is a Multilateral, Neocolonial Failure - 17th Feb 21
First year of a Stocks bull market, or End of a Bubble? - 17th Feb 21
5 Reasons Why People Prefer to Trade Options Over Stocks - 17th Feb 21
The Gold & Gold Stock Corrections Are Normal - 17th Feb 21
WARNING Oculus Quest 2 Update v25 BROKE My VR Headset! - 17th Feb 21
UK Covid-19 Parks PACKED During Lockdown Despite "Stay at Home" Message - Endcliffe Park Sheffield - 17th Feb 21
How to Invest in ETFs in the UK - 17th Feb 21
Real Reason Why Black and Asian Ethnic minorities are NOT Getting Vaccinated - NHS Covid-19 Vaccinations - 16th Feb 21
THE INFLATION MEGA-TREND QE4EVER! - 16th Feb 21
Gold / Silver: What This "Large Non-Confirmation" May Mean - 16th Feb 21
Major Optimism for Platinum, Silver, and Copper - 16th Feb 21
S&P 500 Correction Looming, Just as in Gold – Or Not? - 16th Feb 21
Stock Market Last pull-back before intermediate top? - 16th Feb 21
GAMESTOP MANIA BUBBLE BURSTS! Investing Newbs Pump and Dump Roller coaster Ride - 16th Feb 21
Thinking About Starting to Trade This Year? Here Are Some Things to Keep in Mind - 16th Feb 21
US House Prices Real Estate Trend Forecast Review - 15th Feb 21
Will Tesla Charge Gold With Energy? - 15th Feb 21
Feeling the Growing Heat and Tensions in Stocks? - 15th Feb 21
Morgan Stanley Warns Gasoline Industry Is About to Become Totally Worthless - 15th Feb 21
Debts Lift Gold - Precious Metal Prices Will Rise on a Deluge of Red Ink - 15th Feb 21
Platinum Begins Big Breakout Rally - 15th Feb 21
How to Change Car Battery Without Losing Power, Memory, Radio Code Settings - 15th Feb 21
Five reasons why a financial advisor can make a big difference to your small business - 15th Feb 21

Market Oracle FREE Newsletter

FIRST ACCESS to Nadeem Walayat’s Analysis and Trend Forecasts

Investors Should Focus on Chinese Agri-Food Stocks Opportunities

Commodities / Agricultural Commodities Feb 11, 2011 - 03:22 AM GMT

By: Ned_W_Schmidt

Commodities

Best Financial Markets Analysis ArticleToday a sign of true wealth is owning a horse. Cost of feeding them has escalated dramatically as Agri-Food prices have risen. Owning two horses is an ostentatious flaunting of one’s wealth. Paying an Iowa farmer for corn with which to produce ethanol is still criticized by many poorly informed individuals. They might better serve to lower food prices if they attacked the frivolous feeding of  Agri-Foods to horses. Perhaps horse ownership should be banned except on working ranches. That all said, any Agri-Food shortages around the world are due to government policies. Horses and weather only serve to exacerbate the situation.


As is readily apparent in the chart above, Agri-Food prices continue to march into all time high territory.  Weather has certainly played a role in such a development. Drought in China being the latest development to follow the worst bout of bad weather in Australia’s history. Today’s weather story is not about rain, or lack thereof, but rather the frigid cold covering North America.

From Kansas City to St. Louis temperatures are running -40 to -10 F(-180 to0 -20 C).  From that line north seems that snow is covering all. That is serving to restrict the flow of Agri-Foods, and just about the movement of everything else. While the longer term forecasts for Agri-Food supplies are indeed bullish for prices, today’s North American weather may be a factor.

But Spring will come. So will the thawing and rains where they are needed. As that happens, Agri-Foods will again be flowing more freely in North America. Prices in short-term will be vulnerable then to improved supply flow. About that time too will flow the first of planting intention reports for North America. With visions of high prices dancing in their heads, farmers will have high intentions. Reports on planting intentions will likely be an exaggeration of reality, but an appearance of high intentions will dominate.  Spring weather and planting reports may serve to provide the first Agri-Food price correction in some time.

While corn is on the mind of traders because of the growing short supply situation in North America, the world might better look at developments in rice. As the above chart portrays, U.S.  rice prices have broken through the last high. U.S. rice prices are now at a 90-week high, and seem poised to move higher. Factors driving prices upward include expectations for lower U.S. rice plantings as farmers shift to more profitable corn and soybeans and reports of tight supplies in China.

Rice is perhaps more vulnerable to upward price pressure than many might expect. Reason for that is a myopic focus on the big picture. Like all macro numbers, or averages, nothing of the variance of those rice holdings is immediately evident. In the above graph, using USDA estimates, the world has about 76 days of rice consumption in reserves, shown by left bar in chart above.

That number, however, tells us nothing of the distribution of rice reserves. China consumes about  30% of world’s rice, but its rice reserves are 46% of the world’s total. As the middle bar in chart indicates,  China has about 115 days of rice consumption set aside. If we exclude the Chinese rice influence, the world has only about 59 days of consumption in reserve. Some nations are obviously going to be very short of rice this coming year.

Chins is the epicenter of the world’s increasingly tenuous Agri-Food situation. India’s ascendency in the global economic hierarchy will only serve to exacerbate the situation. Investors have already benefitted from this situation as the first tier Agri-Equities have moved higher, outperforming the market. Current opportunity would seem to lie with those most close to the Chinese Agri-Food situation.

Second tier Agri-Equities with direct exposure to China have, one, performed exceptionally well over time, and, two, marked time for most of the past year. Chinese Agri-Equities seem the better alternative as they have been building a foundation for some time, have direct exposure to China, and have fairly negative perceptions problems at the present time. Investors should be now researching these Chinese Agri-Equity opportunities.

By Ned W Schmidt CFA, CEBS

AGRI-FOOD THOUGHTS is from Ned W. Schmidt,CFA,CEBS, publisher of The Agri-Food Value View, a monthly exploration of the Agri-Food grand cycle being created by China, India, and Eco-energy. To contract Ned or to learn more, use this link: www.agrifoodvalueview.com.

Copyright © 2010 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.


Comments

E Smith
14 Feb 11, 16:39
horse ownership

In response to your unacceptable statement, "Perhaps horse ownership should be banned except on working ranches."

I have this to say: Perhaps your freedom to publish should be banned. Have you bothered to work out how much tillable land there is on this planet - and how much is not utilized or is not utilized efficiently? Have you bothered looking at the huge benefits of nuclear power vs fossil fuel, making biofuels entirely unneccesary??

I think this anti horse ownership statement is beyond offensive.

E


Post Comment

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

6 Critical Money Making Rules