Commodities Sectors

I have mentioned repeatedly that the Ag/farm sector has been one of our favorites since last summer.

Mike Panzner does the breakdwon for us: 

"Over the past nine months, the Reuters/Jeffries CRB index has essentially gone sideways, and five out of six of its sub-sectors haven’t really moved one way or the other. However, one group stands out: the agriculture sector, with a 33% gain relative to the CRB index."


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Discussions found on the web:
  1. Polly Anna commented on Jul 5

    And you thought the Fed couldn’t blow a new bubble. Soft commods it is! With a little help from the gov’s ethanol ruse it’s off and running.

  2. Albert commented on Jul 5

    Does Mike Panzner publish his thoughts somewhere else first (or have his own blog that I cannot find) or is this the locale where he shares his insights, and comments about his observations should be made here?

    I posted a slightly updated analysis of his to your post of Monday which just underscores his point and just wanted to make sure he saw it.


    BR: He has a few outlets, including his book related blog (, but to answer your query, I get them from him via email, and post the most interesting ones . . .

  3. b commented on Jul 5

    Yeah, soft commodities have been a great sector for the past year, and a natural extension of the themes, proffered here and elsewhere.

    Question is, how do you play it? Companies like Deere, Monsanto, etc. might be a decent indirect play, but the trouble I’ve had here is getting clean plays short of buying futures on commodities themselves. Ideas?

  4. Woodshedder commented on Jul 5

    b- you might check out Lindsay Manufacturing Corp. LNN.

  5. Stuart commented on Jul 5

    Soft commodities have alot of drivers pushing demand so this trend is not one that is likely to end any time soon, especially with more money going into Asian pockets increasing demand for higher quality food stuffs. Don Luskin stated a few days ago on Kudlow that Chinese peasants strive to slave in the fields to earn a few US cents a day. Besides being an assonine and offensive comment – if I was Asian I would’ve cancelled any account I had with Luskin if I had any, not to mention any chinese hearing this I’m sure would not like hearing their place is in the fields slaving away to support our standard of living for a few cents (good way to seriously piss off your bankers and turn off the spigot supplying our required daily fix from our capital pushers), anyhow the point is, if these millions of farmers modernize their agricultural techniques, this will have a seriously dramatic effect I would think on soft commodity supplies. But then again, we’d have to pay them more than 20 cents a day. What an idiot.

  6. peter from oz commented on Jul 5

    barry you might see grains flatten a little now that our (Oz) drought has broken in certain strategic areas
    rgds pcm

  7. Farmer Brown commented on Jul 5

    b- Have you checked out the ETF DBA?

  8. Brian commented on Jul 5

    As you get more wealthy you eat higher up on the food chain. More steaks and the like. That in turn causes a big increase in the amount of grain needed to feed the cows, pigs, etc. That’s what’s really moving the ag commodities.

  9. b commented on Jul 6

    Thanks Farmer Brown – this is just what the doctor ordered.

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