August 4, 2010 - Grain Prices Are Spiking Everywhere

Featured Trades: (WHEAT), (CORN), (SOYBEANS)
PowerShares DB Multi Sector Commodity Trust
Teucrium Commodity Trust Corn

2) Grain Prices Are Spiking Everywhere. Now the grains are literally on fire. News reports over the weekend of wild fires triggered by historic draught conditions in Russia and the Ukraine, consuming vast swaths of wheat have sent prices flying. The Food and Agriculture Organization (FAO) now predicts that 10-15 million tonnes of wheat will go missing this year, leading to global supply shortages. The big problem is that the breadbasket of Europe has long been the low cost provider of grain for the world market, and their absence is going to squeeze major consumer nations, like China and India. You all know that I have been wildly bullish on the ags since June (click here for the call). Since then, the corn ETF has rocketed 18%. I have recommended the agriculture ETF (DBA) for the past year, which has long been moribund. But its 9.2% weighting in wheat took it up a healthy 12% in July. If anyone had any doubt about the existence of global warming, you better take a look at these charts.

PowerShares DB Multi-Sector Commodity Trust Agriculture Fund

Legal Disclaimer

There is a very high degree of risk involved in trading. Past results are not indicative of future returns. MadHedgeFundTrader.com and all individuals affiliated with this site assume no responsibilities for your trading and investment results. The indicators, strategies, columns, articles and all other features are for educational purposes only and should not be construed as investment advice. Information for futures trading observations are obtained from sources believed to be reliable, but we do not warrant its completeness or accuracy, or warrant any results from the use of the information. Your use of the trading observations is entirely at your own risk and it is your sole responsibility to evaluate the accuracy, completeness and usefulness of the information. You must assess the risk of any trade with your broker and make your own independent decisions regarding any securities mentioned herein. Affiliates of MadHedgeFundTrader.com may have a position or effect transactions in the securities described herein (or options thereon) and/or otherwise employ trading strategies that may be consistent or inconsistent with the provided strategies.