Home Logon FTA Investment Managers Blog Subscribe About Us Contact Us

Search by Ticker, Keyword or CUSIP       
 
 
 
Blog Home
Bob Carey
Chief Market Strategist
Bio
X •  LinkedIn
 

  Agriculture Prices Take Breather Following Strong Decade
Posted Under: Commodities
Supporting Image for Blog Post

 

View from the Observation Deck

  1. The S&P 500 price-only return was 24.2% from 4/23/02-4/23/12. Soft commodity prices performed as follows: Sugar (+261.%); Coffee (+226.7%); Corn (+213.2%); Soybeans (+203.2%); Cotton (+163.2%); and Wheat (+136.3%).
  2. Since commodities have historically been priced in U.S. dollars, its performance should be noted. The U.S. dollar declined 31.9% (U.S. Dollar Index/DXY) against a basket of currencies for the 10-year period ended 4/23/12. The declining dollar clearly provided a boost to those soft commodity returns.
  3. One of the key drivers of the demand for agriculture products in the past 10 years is the rising standards of living in emerging market (developing) countries, particularly the BRIC (Brazil, Russia, India and China) countries. Africa could play a role moving forward.
  4. China, India and Brazil spent the majority of 2010-2011 raising interest rates to curb inflation, which naturally tempered some of each nation's economic growth.Brazil and India have begun to cut their benchmark rates.
  5. A recent survey by the Norton Rose Group found that 91% of respondents believe the BRIC countries will have a significant impact on the future of agri-business as both producers and consumers.
  6. Overall, 67% of international respondents from the food and agriculture industries said they intend to increase investment in agri-business over the next 12 months.
  7. Events like food shortages, droughts, and natural disasters can influence agriculture prices in the short-term. Investors focused on the long-term growth potential of agriculture products should consider buying on dips, in our opinion.
Posted on Tuesday, April 24, 2012 @ 4:45 PM • Post Link Print this post Printer Friendly

These posts were prepared by First Trust Advisors L.P., and reflect the current opinion of the authors. They are based upon sources and data believed to be accurate and reliable. Opinions and forward looking statements expressed are subject to change without notice. This information does not constitute a solicitation or an offer to buy or sell any security.
Search Posts
MARKET ANALYSIS
Market Commentary and Analysis
Market Commentary Video
Monthly Talking Points
Quarterly Newsletter
Market Observations
Subscribe To Receive Email
 


 PREVIOUS POSTS
It’s Tough To Stay On Top!
Job Creation to Drive REIT Recovery from this Point Forward
The Question of Recession
Sell in May and Go Away! Think about it first.
Will the 2016 Summer Olympics Boost the Bovespa?
India's Stock Market Rebounding Despite Stubborn Inflation
Technology Stocks Have More to Give
A Preview of the 2nd Quarter
Managed Care Providers Back on Their Feet after "Obamacare" Knockdown
Job Growth is a Welcome Sight for the Autos
Archive
Skip Navigation Links.
Search by Topic
Skip Navigation Links.

 
The information presented is not intended to constitute an investment recommendation for, or advice to, any specific person. By providing this information, First Trust is not undertaking to give advice in any fiduciary capacity within the meaning of ERISA, the Internal Revenue Code or any other regulatory framework. Financial professionals are responsible for evaluating investment risks independently and for exercising independent judgment in determining whether investments are appropriate for their clients.
Follow First Trust:  
First Trust Portfolios L.P.  Member SIPC and FINRA. (Form CRS)   •  First Trust Advisors L.P. (Form CRS)
Home |  Important Legal Information |  Privacy Policy |  California Privacy Policy |  Business Continuity Plan |  FINRA BrokerCheck
Copyright © 2024 All rights reserved.