How to Play the Rise in Agricultural Commodities
So far this year, agricultural commodities have outperformed most other asset classes. While some have outperformed others in general, we have seen strong performances.
- Corn is up nearly 10 percent.
- Wheat is up over 10 percent.
- Soybeans are up over 5 percent.
- Cotton is up over 8 percent.
- Coffee is up over 80 percent.
The list goes on, but the point is made. In a market where investors are becoming jittery holding stocks after such a large increase in value, I suspect that some of that money is going to find its way into agricultural commodites and related assets. This could be the catalyst that will drive agricultural commodities to a higher fundamental valuation, which is warranted given the fact that demand for these commodities is steadily increasing, while supply is not.
Investors looking to invest in agricultural commodities have a wide array of options, and while they will all rise in an agriculture bull market, before investing, it is useful to look at their merits and detriments.