Here it is in a nutshell: Prices of grains and cotton have skyrocketed year to date. The United States Department of Agriculture's (USDA) report released Thursday stated that corn and wheat prices have doubled in the past year. Soybeans were up 50% and cotton was up 155%, as reported in the Wall Street Journal.

What has caused these sharp increases? The key mover has been exports. China, India and countries in the Mideast are stockpiling grains over fears that they will not have enough to feed their people. Corn in storage fell 15% on March 1. Corn has been hit doubly hard because 40% of it is used for ethanol production and a large amount goes for livestock feed.

Continue reading USDA's Crop Report Signals Higher Food Prices

USDA's Crop Report Signals Higher Food Prices originally appeared on BloggingStocks on Fri, 01 Apr 2011 10:00:00 EST. Please see our terms for use of feeds.

This year get ready to open your wallet wider and expect higher credit card bills for the basics like food, clothing and energy. You are probably wondering what is going on. While you weren't paying much attention, the price raw commodities surged in 2010. Corn, sugar, wheat, cotton, coffee and soybeans prices soared last year, as reported in the Wall Street Journal.

A confluence of factors pushed prices up. We had and still have demand explosion from China and India. The United Nations Food and Agriculture Organization's monthly food index which monitors a basket of commodities including meat, dairy and sugar rose for the sixth straight month to a record.

Continue reading Higher Commodity Prices Are Grabbing Your Money

Higher Commodity Prices Are Grabbing Your Money originally appeared on BloggingStocks on Thu, 03 Feb 2011 14:30:00 EST. Please see our terms for use of feeds.

Continue reading China Signs a Deal to Buy Soybeans from U.S. Companies

China Signs a Deal to Buy Soybeans from U.S. Companies originally appeared on BloggingStocks on Fri, 21 Jan 2011 11:00:00 EST. Please see our terms for use of feeds.

Reuters quoted Federal Reserve Chairman Ben Bernanke as saying: "We're not in the business of trying to create inflation. Our purpose is to provide additional stimulus to help the economy recover and to avoid potentially additional disinflation, which I think we'll all agree could also be worrisome."

Bernanke claims that inflation is below the Fed's 2% target. That's hogwash! Sure if you use the "core" CPI, which leaves out food and energy, that may be the case. Not to worry.

Continue reading Bernanke Says He Does Not Want to Create Inflation

Bernanke Says He Does Not Want to Create Inflation originally appeared on BloggingStocks on Sun, 07 Nov 2010 11:10:00 EST. Please see our terms for use of feeds.

Continue reading Corn, Wheat and Soybean Prices Surge Higher on Weather Problems

Corn, Wheat and Soybean Prices Surge Higher on Weather Problems originally appeared on BloggingStocks on Mon, 20 Sep 2010 10:00:00 EST. Please see our terms for use of feeds.

Rumors move markets, especially the commodity markets. The story of the day is a rumor that corn yields will be lower than forecast. The United States Department of Agriculture (USDA) originally forecast corn yields to be 165 bushels per acre. However, with the weather being hotter and drier east of the Mississippi, yields could come in lower, as reported by the Associated Press.

That sparked a rally in corn futures with the December contract up 17 cents to $4.64 per bushel (each one cent equals $50). Wheat prices are benefiting from the drought in Russia and Russia's export ban. December wheat futures shot up 27.5 cents to $7.41 per bushel. Soybeans also were higher by 26 cents to $10.35 per bushel for the November contract.

Continue reading Corn Prices Soar to a Record High for the Year

Corn Prices Soar to a Record High for the Year originally appeared on BloggingStocks on Mon, 06 Sep 2010 09:00:00 EST. Please see our terms for use of feeds.

Is there a big commodities rally underway? Let's look at the numbers:

• The Commodity Research Bureau index (CRB) of 19 energy, metal and agricultural prices gained 14%, the most since 1974
• Gasoline soared 30% in May
• Gold and copper also surged
• Corn and soybeans reached their highest levels since last September
• Crude oil has jumped 29%, the most since 1999
• Gasoline futures for June delivery surged 31%, the most since 2006
• Cotton futures were up
• Gold is at $980.00 per ounce
• Silver posted the biggest monthly gain in 22 years

So you are probably asking: What is fueling this rally?

Continue reading Is there a big rally in commodities on the way?

Is there a big rally in commodities on the way? originally appeared on BloggingStocks on Fri, 29 May 2009 15:20:00 EST. Please see our terms for use of feeds.

With banking stocks getting crushed in the first few trading days of 2009, is there anywhere to hide?

For those looking to buy stocks, I provided a list of Top 10 Stocks for 2009. You won't find any financial stocks on the list.

Instead, I targeted a few themes that I believed would do well for varying reasons. One theme that I am particularly keen on is agriculture.

In a world that is full of fraud, bank collapses and historically low interest rates, I want to have some defense in any long recommendation.

The thing that makes agriculture so attractive is that the hedge fund maniacs turned this once boring space into the thrill ride of a lifetime. After a roller-coaster year, many great names in the space can be had for cheap prices.

One of the names on the list just got a whole lot cheaper.

Continue reading Don't get down on the farm -- Archer Daniels is a great buy

Don't get down on the farm -- Archer Daniels is a great buy originally appeared on BloggingStocks on Fri, 16 Jan 2009 13:32:00 EST. Please see our terms for use of feeds.

Commodity markets react violently at times. Yesterday was one of them: The USDA (United States Department of Agriculture) reported on Monday that the U.S. increased production for both corn and soybeans.

When it comes to the grain markets, USDA reports are viewed as the "bible." Farmers, grain merchants and exporters follow these predictions and plan their business decisions on these government reports.

For this crop year ending August 31st, the USDA predicted an increase in corn production of 21.4% to 1,790 million bushels and an increase in soybeans of 9.8% to 225 million bushels.

Before the market opened Monday, traders had expected just the opposite, that corn and soybean production would drop because of the late harvest. By the time the market closed, March corn futures were down 30 cents or $1500.00 and March soybean futures fell 83.50 cents or $4175.00 (each 1 cent equals $50.00).

Soybeans may recover a bit quicker than corn because the U.S. is a net exporter of soybeans to China.

If there is one lesson for the trader it is this: "don't take a position going into a major crop report." Surprises can be very painful and costly, especially if a trader long these markets Monday.

I wonder now, should food prices drop?

Sharp drop for corn and soybeans as production increases originally appeared on BloggingStocks on Tue, 13 Jan 2009 12:15:00 EST. Please see our terms for use of feeds.

Continue reading Mexico freezes prices on 150 food products

Mexico freezes prices on 150 food products originally appeared on BloggingStocks on Thu, 19 Jun 2008 18:06:00 EST. Please see our terms for use of feeds.

Continue reading Corn flirts with $8 a bushel on Midwest crop damage from floods

Corn flirts with $8 a bushel on Midwest crop damage from floods originally appeared on BloggingStocks on Mon, 16 Jun 2008 14:48:00 EST. Please see our terms for use of feeds.

Continue reading Corn surges to record on heavy Midwest rain, inflation hedge factors

Corn surges to record on heavy Midwest rain, inflation hedge factors originally appeared on BloggingStocks on Mon, 09 Jun 2008 14:02:00 EST. Please see our terms for use of feeds.

Continue reading Soros says 'commodity bubble' is still in growth stage

Soros says 'commodity bubble' is still in growth stage originally appeared on BloggingStocks on Thu, 17 Apr 2008 17:08:00 EST. Please see our terms for use of feeds.

Continue reading Rice, grain price hikes likely mean even higher U.S. grocery bills ahead

Rice, grain price hikes likely mean even higher U.S. grocery bills ahead originally appeared on BloggingStocks on Mon, 07 Apr 2008 17:56:00 EST. Please see our terms for use of feeds.

Rice hit a new all-time high, and corn neared a record on talk that commodities demand for grains will outstrip supply, Bloomberg News reported Thursday.

Rice, which is a staple food for about 3 billion people, surged 3.6% to $20.26 per 100 pounds Thursday, while corn for May 2008 delivery rose about 0.5% to $5.9875 a bushel, Bloomberg News reported. Government curbs on grain exports and bad weather are contributing to concerns that strong economic growth in emerging markets will cause demand to exceed the market's ability to provide adequate grain supplies.

The song remains the same

Economist Glen Langan told BloggingStocks Thursday the song remains the same regarding commodities, long-term. Although the commodities sector is overbought short-term, that short-term trading condition does not change the sector's secular, long-term fundamentals, which remain very bullish, he said.

"You could argue that a short-term bubble still exists in commodities like rice, wheat, soybean, and corn, so a word to the wise for any Johnny-come-lately traders," Langan said. "But from a fundamental and an economic perspective, grains and other commodities will continue to trend higher, after a correction. Decisions by China, India and others to cut rice exports speak to this trend. I don't see it ending in 2008."

The UBS Bloomberg Constant Maturity Commodity Index of 26 commodities has more than tripled in the last six years, as global demand, led by emerging market growth, has outpaced supplies for both commodities and raw materials.

Continue reading Rice hits record, corn nears high on concern global demand will outstrip supply

Rice hits record, corn nears high on concern global demand will outstrip supply originally appeared on BloggingStocks on Thu, 03 Apr 2008 13:54:00 EST. Please see our terms for use of feeds.

Continue reading Costly crude oil means costly cooking oil for much of developing world

Costly crude oil means costly cooking oil for much of developing world originally appeared on BloggingStocks on Mon, 21 Jan 2008 14:30:00 EST. Please see our terms for use of feeds.

Bunge Limited (NYSE: BG) is everywhere on the food chain according to the AOL Money & Finance profile. This includes being the leading global soybean processor, a leading South American fertilizer maker and the world's largest oilseed producer. The stock has hardly taken a breath in its ascent over the last five years. On December 28, 2007, BG closed at $119.03 per share.

Soy is used in so many products as an alternate ingredient and/or vegan-friendly product, with new ones being created every day. This fact alone might make Bunge a growth story, even if world demand for food was not increasing at such a rapid pace.

Over the last year, Bunge leaped 70%; in the last five years, BG has gained 433%. Normally this is not a place I would be looking for a cheap buy. However, its P/E ratio is only 19, which, given its growth chart, it still seems cheap. When we consider its P/S of 0.33 which is cheap, and a small dividend yield of 0.58%, it does seem like a value, that is if demand continues to rise.

I believe it will continue to rise since the rapidly growing global economy is raising the standard of living dramatically for hundreds of millions of "newly minted capitalists" in China, Russia, India, Eastern Europe, Brazil and elsewhere. Improved of at least changing diets are 'feeding demand,' and people are also eating much more.

Continue reading Chasing Value: Bunge Limited (BG) in name only

Chasing Value: Bunge Limited (BG) in name only originally appeared on BloggingStocks on Fri, 04 Jan 2008 18:13:00 EST. Please see our terms for use of feeds.

For Archer Daniels it's food first, energy second originally appeared on BloggingStocks on Wed, 31 Oct 2007 18:05:00 EST. Please see our terms for use of feeds.

The Mosaic Company (NYSE: MOS) volatility elevated as MOS at record high into EPS.

MOS, a producer and marketer of concentrated phosphate and potash crop nutrients, was spun out of Cargill in 2004. MOS is recently up 10 cents to $53.35. MOS is expected to report earnings per share (EPS) on October 9th. MOS October option implied volatility of 52 was above its 26-week average of 40 according to Track Data, suggesting larger price risks.

Potash Corp./Saskatchewan (USA) (NYSE: POT) volatility elevated as POT at record high on grain price rally:

POT, the world's largest fertilizer enterprise, by capacity, was recently up $1.43 to $105.58. SBSH says "Potash shortages possible in 2008." SBSH goes on to say "we think high prices for wheat and corn will send a signal to farmers in developing countries like China to increase Potash application rates." POT over all option implied volatility of 46 is above its 26-week average of 39 according to Track Data, suggesting larger price risks.

Option update provided by Stock Specialist Paul Foster of theflyonthewall.com.

Option update 9-28-07: Mosaic and Potash at record numbers on strong fertilizer demand originally appeared on BloggingStocks on Fri, 28 Sep 2007 16:41:00 EST. Please see our terms for use of feeds.

Gas prices: Corn is not a free market answer originally appeared on BloggingStocks on Thu, 10 May 2007 16:10:00 EST. Please see our terms for use of feeds.