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.

The next year may bring higher global grain prices. Several factors are coming together to create supply-demand shortages. Let's first look at the demand side.

Globally, the demand for grains, both feed and consumer products, is increasing rapidly. Developing countries are coming out of the recession and their people are demanding more food products. Food prices are rising across the globe. A Wall Street Journal (subscription required) article states that the United Nations Food and Agriculture Organization said its Food Price Index rose 3.7% to 205 -- 44 points in November -- the fifth straight monthly increase. This takes the index to just 8 points below its peak in June 2008.

Continue reading Global Grain Prices Likely to Rise in 2011

Global Grain Prices Likely to Rise in 2011 originally appeared on BloggingStocks on Thu, 02 Dec 2010 11:30:00 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.

One of the broadest measures for commodity prices is the 19-commodities Reuters-Jefferies CRB Index. For October, the index was up 4.8% after an 8.5% gain in September, as reported in Investors.com.

Sugar and cotton started the trend, rising more than 20% each. Corn was up 17% and arabica coffee rose 11%.

Continue reading How Did Commodities Do in October?

How Did Commodities Do in October? originally appeared on BloggingStocks on Mon, 01 Nov 2010 09:30:00 EST. Please see our terms for use of feeds.

Corn futures continued their spectacular rally. In the past four days, December corn futures have risen from $4.88 to $5.44 per bushel (each penny equals $50).

Even though we have a good corn crop this year, the situation next year will be much worse. The U.S. government said that leftover supplies will fall to a 15-year low, as reported in the Financial Times.

From 2007 to 2008, grain prices shot up to all-time highs when talk of a worldwide food crisis occurred. Now again, the same dynamics are beginning to formulate.

Continue reading Corn Prices Surge Amid Growing Fears of Another Food Crisis

Corn Prices Surge Amid Growing Fears of Another Food Crisis originally appeared on BloggingStocks on Tue, 12 Oct 2010 10:00:00 EST. Please see our terms for use of feeds.

What is the connection between feeder cattle and corn? Feeder cattle are placed on feed lots to fatten up before slaughter. Their weight gain is between 800 to 1,200 pounds each. The biggest expense for feedlot owners is grain. Corn is used as the main feed grain. Therefore if corn prices drop, feedlot owners pay less for feed and consequently will reap higher profits.

What kicked off the drop in corn prices was a report by the U.S. Department of Agriculture (USDA) that inventories before harvest were the highest in four years, as reported in Businessweek. That news hit the corn market hard. December corn futures traded at $4.95 per bushel, down 9.4 cents.

Continue reading Feeder Cattle Prices Jump as Corn Slumps

Feeder Cattle Prices Jump as Corn Slumps originally appeared on BloggingStocks on Fri, 01 Oct 2010 13:30:00 EST. Please see our terms for use of feeds.

Continue reading Gold Jumps to a New Record High

Gold Jumps to a New Record High originally appeared on BloggingStocks on Wed, 22 Sep 2010 10:00:00 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.

Continue reading China to Buy More Corn Starting This Year

China to Buy More Corn Starting This Year originally appeared on BloggingStocks on Mon, 26 Jul 2010 09:30:00 EST. Please see our terms for use of feeds.

Commodities often move counter to the U.S. dollar. The dollar is selling down, mainly because of the European Union agreement to support Greece.

Grain traders, seeing the weaker dollar moved in on the buy side of wheat and soybeans. Here are prices as of 9:30 EDT:

Continue reading Weaker Dollar Triggers Higher Wheat and Soybean Prices

Weaker Dollar Triggers Higher Wheat and Soybean Prices originally appeared on BloggingStocks on Mon, 12 Apr 2010 11:50:00 EST. Please see our terms for use of feeds.

Why are corn futures down so much? It seems that two factors converged to drive the price down by 49 cents to $3.76 per bushel this week: The first is supply and the second is reduced shipment.

On the supply side, the Department of Agriculture issued its report of crop production on January 12. The nation's harvest was estimated to be 13.151 billion bushels, up 8.8% from a year ago. And that's not all, global supplies will add to the pricing pressure as global supplies of corn, wheat, rice and soybeans are expected to be up 8.3%, to the highest level since 2002.

Prices could drop even further after the Brazil and Argentina harvests, due to start next month.

Continue reading Corn Futures Got Hammered This Week

Corn Futures Got Hammered This Week originally appeared on BloggingStocks on Fri, 15 Jan 2010 10:00:00 EST. Please see our terms for use of feeds.

Continue reading It's time to end the federal government's corn/ethanol subsidy

It's time to end the federal government's corn/ethanol subsidy originally appeared on BloggingStocks on Wed, 15 Jul 2009 13:20:00 EST. Please see our terms for use of feeds.

Why did this happen? Berry and Rees reported that today the Agriculture Department released its report on corn plantings which forecast 87.035 million acres up from 85.982 million acres planted in 2008. More acres mean more corn and more corn means lower prices.

Continue reading Why are corn traders screaming "get me out or this market"?

Why are corn traders screaming "get me out or this market"? originally appeared on BloggingStocks on Wed, 01 Jul 2009 15:00:00 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.

Continue reading Doomsday Scenario: Cheap vodka, rural America goes dark

Doomsday Scenario: Cheap vodka, rural America goes dark originally appeared on BloggingStocks on Mon, 09 Mar 2009 07:00:00 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.

This post is part of a series featuring bargain stocks that are worth a look now. See more Cheap Stocks.

Every time I write about Monsanto Company (NYSE: MON), I get e-mails from vocal opponents of genetically modified foods. It strikes me as unusual, if only because there are so many companies out there doing business in an ethically questionable manner, and I'm rarely e-mailed about most of them. But, hey -- I can't blame anybody for being protective of the food supply.

If you're morally opposed to Monsanto, I definitely don't recommend you invest in it. Otherwise, there are valid reasons for taking a closer look at this agricultural chemicals firm. For example, on October 21, S&P Ratings hiked its long-term ratings on MON from "A" to "A+," citing the "expected continuation for favorable business trends ... a very strong market position ... and an impressive pipeline of new products that should underpin strong future earnings and cash flow."

Add sugar cane to the pipeline; Monsanto recently announced its intention to acquire Brazil's Aly Participacoes Ltda for $290 million. With sugar cane emerging as a popular alternative to corn for ethanol production, the acquisition makes sense. Carl Casale, the company's head of global strategy and operations, observed, "... we think that the biotechnology traits that we've invested in [corn] can bring a lot of value to sugar, as well."

Continue reading Cheap Stocks: Monsanto Company

Cheap Stocks: Monsanto Company originally appeared on BloggingStocks on Mon, 08 Dec 2008 09:20:00 EST. Please see our terms for use of feeds.

In farms, as on Wall Street, prices drop originally appeared on BloggingStocks on Fri, 21 Nov 2008 18:42:00 EST. Please see our terms for use of feeds.