Playing the Sugar Rush

From Seeking Alpha

Although sugar's still way off its record high of 66 cents/lb (set back in 1974), the commodity is still up 88% year-to-date.

The rise has been spectacular, but some analysts think sugar's future looks even sweeter. Take Jim Rogers, who told Bloomberg earlier this month that "sugar is certainly going to go much, much higher during the course of the bull market."

Investors seeking an exchange-traded play on sugar can check out the futures-based iPath Dow Jones AIG Sugar Total Return Sub-Index ETN (NYSE Arca: SGG). Year-to-date, SGG is up 62%, and lately has been one of the better performers in our Breakfast Index.

Other sugar-related (although more broadly based) exchange-traded vehicles include the PowerShares DB Agriculture Fund (NYSE Arca: DBA), which tracks futures in corn, soybeans, wheat and sugar; and the ELEMENTS Rogers International Commodity Agriculture ETN (NYSE Arca: RJA), which tracks 20 futures contracts worldwide.

Agriculture Investor Weekend Reading

Soleil sees potash prices set to skid, from Vancouver Sun

Soleil Securities said on Friday that potash prices were set to skid about 25 percent, noting that Agrium Inc AGU.TO said late on Thursday that it cut U.S. potash pricing. Soleil analyst Mark Gulley said Agrium is dropping its U.S. list prices around 25 percent, in line with price cuts by Russia’s Silvinit SILV.RTRS and Germany’s K+S SDFG.DE.

The Omnivore’s Delusion: Against the Agri-intellectuals, from The American

I’m so tired of people who wouldn’t visit a doctor who used a stethoscope instead of an MRI demanding that farmers like me use 1930s technology to raise food. Farming has always been messy and painful, and bloody and dirty. It still is.

But now we have to listen to self-appointed experts on airplanes frightening their seatmates about the profession I have practiced for more than 30 years. I’d had enough. I turned around and politely told the lecturer that he ought not believe everything he reads. He quieted and asked me what kind of farming I do. I told him, and when he asked if I used organic farming, I said no, and left it at that. I didn’t answer with the first thought that came to mind, which is simply this: I deal in the real world, not superstitions, and unless the consumer absolutely forces my hand, I am about as likely to adopt organic methods as the Wall Street Journal is to publish their next edition by setting the type by hand.

Jim Rogers Says U.S. Commodity Curbs to Drive Markets Overseas, from Bloomberg

As the U.S. contemplates tighter regulation, China’s interest in commodities is accelerating, Rogers said. The world’s most populous country already accounts for about one- third of global copper usage. It also accounts for about one- sixth of wheat demand and one-fifth of soybeans, according to the U.S. Department of Agriculture.

“The three commodity exchanges in China are booming,” he said. “Dalian trades more soybean contracts than Chicago does already, and that’s with a blocked currency, a closed market. Can you imagine what’s going to happen if and when they open that market up to foreigners? It’s going to explode.”

Sugar Climbs to 28-Year High in N.Y. on India Weather Outlook, from Bloomberg

Sugar climbed to the highest price in more than 28 years in New York on concerns that low monsoon rainfall may stunt cane crops and reduce output in India, the world’s largest producer after Brazil.

“Subdued rainfall activity is likely to continue over western, central and peninsular parts of the country” in the next two to three days, the India Meteorological Department said today. Precipitation in India, the world’s largest sugar consumer, was 64 percent below the long-term average in the week ended Aug. 5, the weather bureau said yesterday.

“Concerns over poor supply and strong imports in India have been a major driver of recent price strength, and further fuel for the rally today came from forecasts by the Indian weather office for weak rains in most cane regions,” London- based Barclays Capital said in a report.

Sugar High

more on sugar from the FT.

Inflation-wary investors have lately kept a close eye on the rising price of hydrocarbons: oil has risen by a third this year. But carbohydrates are what they should be worried about. Shortages have pushed up raw sugar futures 65 per cent since January. On Thursday, prices broke through 19.75 cents a pound, reaching levels last seen in 1981. Refined white sugar is at a record high. Next year could see bigger price spikes.

Weather is the main reason. Drought in India, the world’s biggest consumer, has hit local harvests. Heavy rain in Brazil, the world’s largest sugar exporter, has wrought the same effect. Ominously, such weather patterns are typical of El Niño, the seasonal warming of the Pacific that can cause volatility across a wide range of commodities.

Now that potash prices established, buy into fertilizer sector

Bullish article in the Vancouver Sun.

With the settlement of the Indian contract with Canpotex and Belarussian Potash Co. (BPC) settled, there is an established international benchmark for potash prices. There is also a North American benchmark now that Potash Corp. cut its domestic pricing, according to Dundee Securities analyst Richard Kelertas.

He expects Agrium Inc. to meet this new pricing level and revised his potash price forecast lower with these better indications on both domestic and overseas prices.

"We have been advising investors to take some short term profits since May," Mr. Kelertas said in a report this week. "However, we now believe that after the overbought period from March to May and the subsequent decline period from the peaks in May to current prices is over. As such, we would advise both short and long-term investors to buy into the fertilizer sector."

Refined Sugar Jumps to Highest Since at Least 1989 on Shortfall

From Bloomberg.

White sugar rose to its highest since at least 1989 in London on analysts’ forecasts for a global supply shortfall after lighter-than-expected monsoon rains in India, the second-biggest producer.

Monsoon rainfall was 18 percent lower than usual in the week to July 29, according to the country’s weather office. Deficient rain in July last year reduced cane yields, causing sugar output to halve and turning India into a net buyer for the first time since the 2005-06 season.

“Momentum is strong,” Eugen Weinberg, an analyst with Commerzbank AG in Frankfurt, said by phone. “Fundamentally, the market is in short supply and prices will be supported.”

White, or refined, sugar for October delivery surged $11.10, or 2.3 percent, to close at $502.90 a metric ton on Liffe, the highest since at least January 1989

Look who's farming now - The seedling cultivator

Fortune article here profiling under 40 organic farmers.

Motley Fool on China Green Agriculture (CGA)

The Motley fool has been pumping CGA lately:

As an organic fertilizer supplier, China Green Agriculture is expected to benefit from China's push toward green technologies. With its $586 billion domestic stimulus package, the government wants to develop renewable energy projects that benefit more than just solar companies such as Suntech Power (NYSE: STP) and Yingli Green Energy (NYSE: YGE); more than a third of the funds are being spent on a broad category called "Green GDP." The economic stimulus and rising demand for healthier food will help China Green -- as well as green animal-feed companies such as AgFeed Industries (Nasdaq: FEED) -- rapidly expand. China Green's CEO expects the nation's percentage of organic fertilizer use to grow to 50% of total fertilizer use within five to 10 years, from 25% currently, as China’s farm land becomes degraded from chemical pollution.

And apparently also named it their “Number 1 Global Stock Idea for 2009″

Soybeans Surge Most in Nine Months, Corn Gains on U.S. Exports

Nice day for corn and soybeans.

July 30 (Bloomberg) -- Soybeans surged the most nine months

and corn gained after a government report signaled strong demand
for cheap supplies from the U.S., the world’s largest producer
and exporter of both crops.
U.S. exporters sold 1.92 million metric tons of soybeans to
China, with 1.8 million set for delivery in the marketing year
that begins Sept. 1, the U.S. Department of Agriculture said
today in a statement. In a separate report, the USDA said export
sales of soybeans jumped 36 percent in the week ended July 23 to
954,543 metric tons. Corn sales in the past four weeks are up 55
percent from a year earlier, the USDA said.
“The export sales were strong for both corn and soybeans,
but Chinese business means soybeans will lead,” said Doug
Bergman, a grain broker for Advantage Traders Group in Chicago.
“Soybean export sales will severely tighten U.S. supplies,”
which the USDA estimates will fall to a 32-year low on Aug. 31,
Bergman said.

Cotton Climbs as U.S. Exports May Increase; Orange Juice Gains

From bloomberg.

The U.S., the biggest fiber exporter, may ship 10.5 million bales overseas next year with the global economy “in a recovery mode,” said Joe Nicosia, the chief executive officer of Cordova, Tennessee-based merchant Allenberg Cotton Co. Exports may reach 13 million bales “if demand takes off and we have a good recovery,” he said earlier this week.

Cotton futures for December delivery rose 0.99 cent, or 1.7 percent, to 60.11 cents a pound on ICE Futures U.S. in New York, the biggest gain for a most-active contract since July 10.

“We’re getting good inquiries from China, and we’re going to do business in China,” Jarral Neeper, the president of Bakersfield, California-based cotton cooperative Calcot Ltd., said on July 28. He estimates China will import 12 million bales in the new marketing year and U.S. exports may reach 11 million bales.

Price Prediction

Cotton prices may touch 72 cents in the next few months, mainly because of consumption gains in China, Neeper said. Calcot represents about 1,400 cotton growers in the western U.S., including California, Arizona and New Mexico.

The fertilizer depression is over

Potash (Pot) up 9% on thursday on bullish comments from their CEO. Bloomberg article here.

“The fertilizer depression is over,” Potash Corp. Chief Executive Officer Bill Doyle said on a conference call.

These guys are basically looking forward and seeing firmer prices and increased demand,” James O’Leary, who helps manage about $3 billion including Potash Corp. shares, for Reno, Nevada-based Navellier & Associates, said today in a telephone interview from New York. “The market’s responding to that.”

Doyle confirmed today that Canpotex Ltd., the export arm of North America’s biggest potash producers, agreed to sell supplies of the commodity to India for $460 a ton, less than producers expected.

“This contract breaks the impasse and opens the door to a return of demand around the world,” Doyle said today on a conference call with investors and analysts. “Buyers now have the clarity they need to resume purchasing.”

Corn Rises Most in Six Months on Acreage Bets, Soybeans Gain

Up 6%. Most in six months. Decent day for soybeans too.

Farmers clearly planted less corn and soybeans because of the wet, cold weather in May and June,” said Tim Hannagan, an Alaron Trading Corp. senior grain analyst in Chicago. “The market is assuming farmers didn’t finish planting all the acres they planned.”

Corn futures for December delivery rose 19.5 cents, or 6.1 percent, to $3.3875 a bushel on the Chicago Board of Trade, the biggest gain for a most-active contract since Jan. 16. Yesterday, the price touched $3.1475, the lowest since Dec. 8.

Soybean futures for November delivery rose 24 cents, or 2.6 percent, to $9.32 a bushel. On July 8, the most-active contract reached $8.8125, the lowest in more than three months.

Reaping reward from farmland

Video from the fortune article:

Betting the Farm

Nice Fortune article on growing investor interest in farmland.

Warner is just one of many financiers around the world making that same bet. Over the past few years hedge fund gurus like George Soros, investment powerhouses like BlackRock, and retirement plan giants like TIAA-CREF have begun to plow money into farmland - everywhere from the Midwest to Ukraine to Brazil. Canadian private equity firm AgCapita, which raised $18 million in 2008 to invest in Saskatchewan cropland, estimates that as of the first quarter of 2009, more than $2 billion of private equity money had been raised for farmland investments globally, and another $500 million was planned.

Marc Faber on Farmland

Brief mention here.

He also recommended investments related to commodities, such as farmland, or the tourism industry.