Wt Agriculture Discussion Threads

[andrewbaker] 27/7/2009 15:19

Given the false markets we are in at the moment, courtesy of political and financial manipulation, this is one of the few homes for investment money where a longer term hold can be expected to produce a reasonable return, IMHO. This is a composite of several commodities, so a certain diversification helps also. We all need to eat and it cannot be said that we are producing too much food, so I'm long here, and staying in. On any fall-back, I may even buy more.

[traderabc] 27/7/2009 14:40

Back to support, it's important that this hold, if not we may well go back to the recent lows just above 5.

[bobdouthwaite] 24/7/2009 16:42

El Nino Is Back And There Will Be Impacts On Weather And Crops

July 23, 2009
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* Analysis by: Gary Drimmer
* Analysis of: El Nino Now Official - Possible Implications
* Published at: www.rightsidenews.com

Summary

El Nino is now officially back. If it continues to strengthen it will impact weather and crops in some major growing areas around the world including India, Malaysia, Indonesia, Australia, Brazil and the USA. It is a question of how strong it gets and how long it lasts, but the first impacts appear to be visible already in India.
Analysis

The bad boy is back! It is official, we are in an El Nino year. So say all the experts, with the Australian weather experts adding their confirmation to NOAA and others. The big question is does it stay a weak, grows further to a moderate phenomena, or grows to a strong El Nino. The strength of the El Nino can have major impacts on weather and therefore the crops many of us focus on.

A bad little boy (El Nino) can wreck havoc on some of the major crop of the world. The FT already has an article on the Monsoon blues that "...threatens India's farms and its economy". Many forecasters are projecting a weak or moderate El Nino, but watch out if it does become moderate or even strong. A strong El Nino could result in a severe drought in India (they have just cancelled the export of wheat from India, just in case they have crop failures and a famine). In India the drought is impacting sugar, corn and pulses already. Other countries that would be impacted by drought would be Indonesia and Malaysia, the two largest producers of palm oil, the largest source of edible vegetable oil and a large share of Wilmar's palm oil base. Lower palm oil production would increase the demand for soybean oil which right now is a major problem for crush rates. This would have a favorable impact on ADM, Cargill, Bunge and Louis Drefus, all major soybean processors in the US and South America. A drought in these countries would also impact rubber production, still critical for airplane tires and some other special uses.

Australia's wheat crop could also be impacted by a drought later this year in their spring season. Australia just increased their wheat crop estimates, but they could drop. Grain companies based in Australia could be impacted by a drop in grain production including ABB, AWB and even Viterra out of Canada who is planning to purchase ABB.

In the Americas, the fishmeal industry could be impacted by a shift away from the coast of their cool Humbolt water current which would be replaced by a warmer, less productive El Nino current. Heavy rains could be seen starting in Ecuador and extending all the way down the Peruvian coast into Chile. On the other side of the continent, Brazil could see some areas with flooding and some with drought, both impacting a needed soybean harvest for early next year.

In the US the crops would not be impacted too much by a severe El Nino, but as can be recalled from the 1997/1998 El Nino, California could be hit by strong storms with lots of rains, floods and mud slides along the southern coast. The grain belt could see a milder winter, which after the past two La Nina years would be well received and would also lower natural gas use.

So there a lot of "coulds" here that need to be watched for if that little boy becomes a bad one.

[walter walcarpets] 20/7/2009 21:54

El Nino also bullish for coffee

walt

[bobdouthwaite] 20/7/2009 16:37

Meanwhile, in India:

Fleeting Rains, Looming Drought to Hit Main Crops


Possibly bullish for wheat and sugar.

[bobdouthwaite] 20/7/2009 16:33

El Nino warning a boost to grain prices?
20/07/2009 10:48:00
Magazine

Weather authorities around the world are warning of a developing El Niño weather pattern in the southern hemisphere, which could hit agricultural production later in the year.



Possibly bullish for wheat and bearish for soya.

[walter walcarpets] 20/7/2009 08:11

El Nino forming.

[traderabc] 16/7/2009 13:30

AGRI-FOOD THOUGHTS
by Ned W. Schmidt, CFA, CEBS
Schmidt Management Company
July 13, 2009

While visions of economic stability and other fantasies dance in the heads of the elves at the Federal Reserve and those in the Obama Regime, the financial markets seem to be losing momentum. Both equity markets and Gold have succumbed to the Summer heat, wilting under the Sun. But sorry that is not global warming, that is just Summer.

With the failing economic policies of the Obama Regime in place, investors might do better for themselves by looking beyond the current situation. Not all economies are mired in the floundering failures of North America. In other parts of the world economic growth continues, though of course it was wounded by the Western recession.

[traderabc] 15/7/2009 13:40

Support sucsessfully tested? Hopefully now we go back to the top of the range (7+). Come on you softs!

[andrewbaker] 09/7/2009 12:07

At the moment there is so much volatility in all markets that trading in and out is expensive, even if you do get it right which won't be every time: so I'm holding what I believe in for the medium term and setting lower stops (which I hope don't get broken!)

[walter walcarpets] 08/7/2009 20:42

I must admit, I was surprised how good the crop report was - after much doom-mongering. hey-ho - the long term trend is still good IMO

walt

[bobdouthwaite] 08/7/2009 17:57

Lets hope so, as I'm now sitting on significant losses! The current harvests in the northern hemisphere look as though they're going to be good, but El Nino is probably making a comeback and the current monsoon in India is faltering. Agricultural production now may be as good as it gets for some time, so there may be a buying opportunity over the next few months.

[traderabc] 08/7/2009 16:11

This is the area that 'should' act as a strong support level.

Hopefully..

[notanewmember2] 03/7/2009 18:05

Check the PHPD thread.

[andrewbaker] 01/7/2009 14:39

traderabc-

Yes, I'm sure that AIGA is not leveraged. Regarding long term, the rolling forward of futures can put a drag on performance, so two points here: maybe longer-term may have been a better expression, but I never buy and hold too long anyway, taking profits when a reversal looks on or has started. I can always buy back in later of I still believe the trend is up.

With agriculture, I believe that long term the trend has to be up, but there will be plenty of short term profit opertunities to take on the way.

[traderabc] 30/6/2009 09:22

Are you sure Andrew? What do you mean by long term? I would hazzard a guess that if this stock took say 4 years to double, you'd get maybe 30% profit?

[andrewbaker] 29/6/2009 17:52

AIGA is not leveraged and is not a short and the holding costs are not that high, so this is worth holding long term.

[traderabc] 29/6/2009 17:00

That's the problem, long term is no good if you are holding this. The time decay will eat up the profits.

[andrewbaker] 29/6/2009 16:56

This is now in a long term up-trend, IMHO.

[walter walcarpets] 24/6/2009 11:31

this looks a bit more promising......

[traderabc] 22/6/2009 13:32

Disappointing, however some good support should come into affect at around 5.7.

[cpl593h] 21/6/2009 18:09

Worth buying AGAP if you pay/receive in pounds; your broker cannot rape you on the £/$ rate when you buy, and then again when you sell.

If you check the Fri close and divide AIGA by AGAP, it's pretty close to market rate on £/$ - could be worth quite a few bob depending on how big a scumbag your broker is.

[hazelton] 19/6/2009 18:31

I doubt it would help , is it not just priced in pounds. With AIGA it has to be bought by pounds too.

[rathkum] 19/6/2009 17:27

Have you considered AGAP? I guess they are fairly similar.