ETF Grind

A Complete Guide to Agriculture ETFs

No, I don't think a broad based commodity ETF is necessarily a worse investment than a pure ag play.

However, using individual ETFs like the DBA, GLD, SLV, DBB or USL you can construct your own commodities portfolio, weighting each commodity according to your personal outlook for each.

But it is simpler, and perhaps safer to stick with something like a DBC or GCC.

On Jun 25 03:33 PM speeddaimon wrote:

> ETF Grind. Nice article, excellent thesis, one which I totally agree
> with. However, can you (or anyone feeling like typing) tell me why
> I should focus on the Ag side of commodities instead of trying to
> use a basket of both Ag, Metals, and fuel? I ask because I bought
> DBC a while back, its done very well, but if there is a good reason,
> I would switch out for something with a better overall long term
> outlook.

A Complete Guide to Agriculture ETFs

A word about global warming.

Its real. Sun spots affect climate, but not nearly enough to explain the rise in global temperatures over the past decades.

And as far as "how can global warming be happening when its still cold at night in Iowa", well I hope no one is persuaded by that specious reasoning.

A Complete Guide to Agriculture ETFs

ETNs are debt instruments, not ETFs.


On Jun 25 09:08 AM megiddo666 wrote:

> Might add the ETF - DAG to the list as well.

A Complete Guide to Agriculture ETFs

I was quoting producer prices, which I thought correlated with consumer prices. Its the rise that matters, not the nominal price quoted. Kinda like quoting delta crude and delta pump prices isn't it?

This article is actually written for people who don't follow the agricultural markets - not even remotely. Just meant to inform average investors looking for a good new ideas for portfolio building. If they want to know more in depth, there are plenty of links to more detailed info. And if they're already experts, then they should be trading the futures market themselves.

Organic agriculture is contraversial, but you cannot dispute the fact that no pesticides equal lower yields. It may be a niche product now, but it is growing rapidly. And it depends on the product. Grass fed beef is absolutely wonderful for the environment because it doesn't use feedstock. But growing wheat organically, for instance, it just a waste of resources.

I don't blame environmentalists for the ethanol debacle. They did bail on corn early on, and don't even like sugar too much. Its all about 2ed gen and 3ed gen fuels for them. Its the fault of the corn lobby and politicians, but they do brand it as "saving the environment", and many people still think corn ethanol does just that. Just trying to disabuse them of that notion.

Cheers mate


On Jun 25 01:52 AM SubsidyEye wrote:

> Corn prices did not peak at $5.50 per bushel in 2008, unless one
> is talking about average monthly prices received by producers. For
> consumers what matters was the price in the cash market (over $7.00)
> and on the CBOT (over $7.50)
>
> www.porkmag.com/upload...
>
> 1.bp.blogspot.com/_xlG...
>
>
> The reasons for the price spike are hotly debated, and while fear
> over a shortage of supply certainly fueled the run-up in prices,
> it was the sharp increase in demand -- fueled by ethanol subsidies
> and mandates in the United States, and subsidized biodiesel in Europe
> -- that was the more fundamental factor.
>
> This article is not telling us anything that anybody even remotely
> clued into what is happening in agriculture have known for at least
> a decade: that it is the composition of demand that is the bigger
> driver than an increase in the numbers of mouths that must be fed.
> It has also been clear for some time that water (exacerbated by climatic
> changes) is a limiting factor.
>
> The author of this article is too dismissive of organic agriculture,
> however. Organic agriculture, as marketed to relatively wealthy consumers
> in the west, accounts for a tiny fraction of the land undercultivation.
> Virtually no feed corn is grown organically. The crops that are under
> organic cultivation tend to be those for which the switch to organic
> methods is easiest and most profitable. Many crops (especially spices
> in the tropics) were already being grown without purchased chemicals
> in any case. The world need not fear organic agriculture. It will
> increase, for sure, but only where farmers see it pay-off: through
> improvement in their own bottom line, and through the advantages
> they see in longer-term soil fertility and yields.
>
> Finally, the authors of this article should know better than to blame
> environmentalists for the corn-ethanol debacle. That bandwagon got
> rolling in the late 1970s, pushed by Big Ag (mainly ADM) and powerful
> corn-state senators. Environmentalists briefly embraced the product
> (from about 2003-2006), but as soon as they saw its dark side they
> abandoned it wholesale. Nowadays, corn-ethanol's fiercest and most
> effective critics come from the environmental community.

A Complete Guide to Agriculture ETFs

Those are ETNS.

Completely different from ETFs.


On Jun 24 01:28 PM Ron Rowland wrote:

> Your complete list might be missing a few (I found 14 others), including
> Jimmy Rogers' fund (seekingalpha.com/symbo...). Others
> for consideration include: FUE, GRU, UAG, FUD, UBC, JJA, NIB, JO,
> JJG, COW, JJS, SGG, BAL

A Complete Guide to Agriculture ETFs

That is a very interesting ETF. But only half agriculture.


On Jun 24 11:12 AM pjjjm wrote:

> Look for the ETF GCC for equal weighted index of 17 commodities that
> are averaged across the futures curve six months out. (www.greenhavenfunds.com/)