Wt Grains Discussion Threads

[dasv] 21/1/2008 20:12

Yes indeed. Do you hold some ls?

Despite it holding its ground today my single share portfolio virtually tracked the FTSE100 with a 5% loss overall. Vicious. But I was determined not to out of panic.

James Ferguson on News 24 was talking about contagion from Credit Default Swaps and monoline insurers. This is the next stage of the credit squeeze.

He pointed out that despite a 100 point in the Fed base rate not a single rate cut has made it to the "man on the street" - the retail cost of borrowing has remained at 6.5%.

This is the difficulty of trying to rate cut your way out of a recession due to a credit squeeze apparently. I knew none of this before - I assumed retail borrowing rates would track base rates. E.g. my HSBC variable rate mortgage tracks the BofE's MPC rate. If it wasn't for the fact I believe rates will drop further in the UK in the short term I would just pay off my mortgage and have done with it. At least that way I'd have less to lose/expose to equities :)

[leedskier] 21/1/2008 19:18

certainly out performed gold today...:)

[sagem] 21/1/2008 07:23

The answer to All this is FOOD the best way to invest is by using ETF's such as
epic code AGGP FOR GRAIN ETC

[leedskier] 17/1/2008 22:53

Good luck tomorrow.

[dasv] 17/1/2008 22:24

Yes indeed - this is why "going to cash" is not a particularly great option - unless you have a cash account in a strong currency. Unfortunately GBP is no longer a member of that club.

I invested in Henderson European Small companies last year and since April have lost 10% - perhaps the blue chips are safer but:-

1. financials may have undisclosed credit derivative black holes
2. manufacturers may be hit by strong Euro (Alstom's chief has mentioned the potential negative impact of the strong euro on making deals

That leaves us with the yen - and potentially currencies like the Canadian dollar and the Australian dollar. These two have been strengthened by the natural resources boom driven by emerging economies. The Ruble too owes some of its strength to Russian natural resources.

To be honest LS, I have felt in recent days that in reality nothing is "safe".... even gold's value is subject to the sentiment of investors - despite it being the "currency of last resort".

[leedskier] 17/1/2008 20:13

I was listening this economist on Channel4 News tonight, saying the GDP is finished and commenting on the slide against the Euro. This made me think that if one expected a return of 15% in a year investing in Euro based equities (or whatever number one chooses) and add to that a 15% depreciation by the GDP against the Euro (it depreciated by 15% last year), one doubles the return. Another currency likely to increase in value against the GDP this year is the Ruble.

[dasv] 17/1/2008 18:35

Fair-play Greatbull - it's probably the safest way into silver - dispenses the risk of investing in silver mining projects or getting your hands dirty with second guessing the forward selling market with Silver Wheaton.

[greatbull] 17/1/2008 18:14

Dasv,

(Sorry, Off topic for AGGP investors)

I never really investigated a Silver related company. I simply invested in PHAG, who, it is my understanding from my e-mail correspondance, hold actual physical silver. Ie as pure a play as you can get without having to physically hold/store the stuff. Main driver being the fundamentals you mentioned above, and the fact that unlike gold, it is a decreasingly available resource, whereas with gold, most of all gold mined is still around.

PHAG is an ETFS and ISAable.

[dasv] 17/1/2008 10:57

yesterday was a bit bleak all round - soft commodities included.

Soya prices were affected by the news that China may put price controls on soya to attempt to defuse inflation - now running at 6.9%.

Fears of a recession also put a dampener on grain futures.

However today soya, corn and wheat have all bounced back.

[dasv] 16/1/2008 13:57

[The following is off-topic AGGP'ers - apologies]

Greatbull,

I considered silver too and did some research - your comments on the following would be welcome:-

Silver is normally a by-product of other mining operations, there are therefore few pure-play silver miners.

Silver as a by product of a mining operation is nearly always forward-sold by miners whose primary (base-metal or precious metal) is non-silver for this reason.

The Forward-Selling of silver production has put a lid on the silver price, depressing the price especially with respect to the excellent fundamentals of the metal: limited supply, numerous industrial applications, and precious metal appeal.

I came across a company called Silver Wheaton who as far as I can see are attempting to corner the forward selling of silver - though their business model is a bit beyond me with my limited knowledge of commodity trading. When I first looked at them, the share price trend was not clear. Looking at them for the first time in 6 months I see a favourable upward trend.

[greatbull] 16/1/2008 11:27

dasv,

Like you, and I suspect most serious investors, always take their tips with a pinch of salt, but they perhaps are a good guide to themes. I tend to buy shares on fundamentals, but with ETFS it is more about perception, and consideration of whether the reasons for price appriciation stack up. I took the plung with Silver (PHAG) a few months ago, and I'm being rewarded very well, on paper, so far. I think the theme for grains at this moment in time also stack up, and seeing the few boards start to appear I think indicates others having the same perception. With hindsight it would have been good to have been in 6-12 months ago, but I think we are still in nice and early to take advantage of this trend.

Gb.

[dasv] 16/1/2008 10:43

davebowler - thanks

Greatbull - I've been meaning to get into soft commodities for ages but never seemed to get round to it. I noticed moneyweek's swing to grains but always take their "tips" with a pinch of salt however I think their summary of macro trends is worthy of consideration. E.g. potash, chinese pork, water, dry bulk shipping, infrastructure, soft commodities, and gold.

[davebowler] 16/1/2008 09:55

Guys there is a similar board on AIGA

Also see CED2-part agricultural commodities ,twice geared

[greatbull] 16/1/2008 09:50

Dasv, Thanks for starting the board. I was very surpised there wasn't one already. Money Week been pushing grain for about a year now. Just got in today at 398.11 (AIGG) I don't think you will get under £4 for much longer.

Gb

[dasv] 15/1/2008 22:53

thanks jamak - that explains it... Precious metals basket - very tempting too...

[jamak] 15/1/2008 22:23

hi dasv - looks like a lot of the GBP ones *were* all launched on that date:

[dasv] 15/1/2008 21:52

hi leedskier,

First off here's the fact sheet from etfsecurities:-



price movement since November has been very favourable. If you mean prior to November - I am still trying to work out why finance.google.com, or TDW protrader or advfn.com does not display historical data for many ETF's prior to about Nov. I can't believe they were all launched on that date - perhaps data was not archived or something.

I note that historical chart data for the USD equivalent of AGGP is available e.g. :-





As far as I know this ETF tracks soya, wheat and corn indexes and is not affected by stock market movements. It is not an investment trust with a discount or premium to net asset value. It is not a fund with a manager.

[leedskier] 15/1/2008 19:12

Hi dasv, Can you help me with price movement since November? Is it like investing directly into gold, in that the price is directly related to the futures market in the price of soyabeans, corn and wheat and thus is not sensitive the the movement in the stock market generally?

I am upto speed now...all very interesting...

[dasv] 15/1/2008 18:29

Considering the bashment that was the wider market today, AGGP held up pretty well. A fall of -2.45% on the close yesterday.

ETFS Wheat fell -0.29%
ETFS Corn fell -1.1%
ETFS Soybeans fell -2.52%

The principle negative component was Soya which has had a tremendous run up to now.

I am advised that adverse weather conditions in Indonesia have affected both soya and rice harvests. Soya is also used for pig feed in China and the appetite for the meat coupled with disease and rising corn use for ethanol pushed up Chinese pork prices in 2007 dramatically:-



Perhaps it's more of the same on the soya market with a small let up in the rise today.

To put today's 2.5% fall in SOYB in context:-

[shoee62] 15/1/2008 09:11

I bought some WEAT on perceived break of descending trend line on dailies, seems to have fallen back today. Looks like a consolidation before an attempt at 1000 on the futures maybe ?

[dasv] 14/1/2008 18:41

Corn soars to record price as demand for feed, fuel may exceed output:-

[dasv] 14/1/2008 17:30

thanks flips,

I will aim to improve the header - let me know if there's anything you want me to add - I will add a quick-link to posts.

[flips] 14/1/2008 17:16

dasv
Thanks for starting this thread, we need a forum to air our views. I also bought in this am at 400.25, so not far behind you.

[dasv] 14/1/2008 16:40

A good start - at close of play this afternoon AGGP now trades at 406p/411p: a 3.81% rise.

[dasv] 14/1/2008 10:14

Started new thread as "commodity" thread failed to render charts, news and fundamentals...

For the record I am long this morning at 398.9p - already unfashionably late to the party ;)