How to Play the Rise in Agricultural Commodities

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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.

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