Palm Oil Seen Dropping as Mistry Has Buy Call on Planters – Bloomberg 09-15-14

Salient to Investors:

Dorab Mistry at Godrej Intl said:

  • Palm oil at a 5-year low creates a buying opportunity for plantation and processing company stocks because producers are still making money.
  • Invest in plantations when palm oil prices are low. In Q4, 2008, when in a similar situation with regard to supply, demand and price, palm oil rapidly made itself competitive and exported its way out of a crisis as Malaysian stocks peaked in December 2008.
  • Prefer processing companies which manufacture specialty fats, oleochemicals, biodiesel and own consumer brands. Upstream companies will benefit when the price cycle turns.”
  • Expects prices to drop 9.6 percent to $588 a metric ton in the next few weeks towards Asian growers’ production cost but not below.
  • Full-year output in Malaysia, the second largest grower, will be more than initially estimated, while production at the largest grower, Indonesia, is also ahead of expectations.
  • Stockpiles will continue to rise and peak in December. Chinese imports will remain thin for at least the next 3 months as high-priced stockpiles are used up.
  • After the record US soybean crop this summer, farmers in Brazil and Argentina may switch to soybeans from corn this year. Argentina will devalue its currency to boost its overseas shipments.

Adrian Foulger and Denis Chai at Standard Chartered recommend plantation stocks to profit from a rebound in prices, and say the way to make money in the palm sector is to buy growth operators when prices are low and sentiment is weak.

Read the full article at  http://www.bloomberg.com/news/2014-09-15/palm-oil-seen-dropping-as-mistry-has-buy-call-on-planter-stocks.html

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All You Need To Know About Agriculture – Jim Rogers On The Markets 01-23-14

Salient to Investors:

Jim Rogers said:

  • Agriculture has to change and prices and profits have to go much higher or we are not going to have any food at any price.
  • We don`t have any farmers because farming has been a nightmare for most people. In the UK, the highest rate of suicide in any economic sector is agriculture. In India, millions of farmers commit suicide.
  • More people in America study Public Relations than study agriculture, some major agriculture universities had to close or change because nobody wants to be a farmer.

Read the full article at http://jimrogersonthemarkets.blogspot.com/2014/01/all-you-need-to-know-about-agriculture.html

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U.S. Farmland Prices May Fall in 2014, Economist Says – Bloomberg 12-10-13

Salient to Investors:

Terry Kastens at Kansas State University said:

  • Farmland values are about to stop rising rapidly, flatten out or even fall 10 percent or so, but will not crash.
  • Rising global crop output and stable renewable-fuel standards are leading to a flattening in commodity prices.
  • Rents in some areas may ease in 2014, with possible big drops in Iowa and Illinois if rents are negotiated every year based on forecasts for crop prices. Rents may rise in riskier growing regions including the High Plains because gains during previous crop rallies were moderate.
  • Land sales by farmers have climbed because producers with ample cash are still buying, while demand by investors eased amid concern that the market may have peaked.
  • Farmland prices may jump if commodity prices surge, sending corn back to $7.
  • We may see higher rents and higher property values in 2 o 10 years if crop output has massive consolidation, and large companies are able to pay higher prices.

Read the full article at http://www.bloomberg.com/news/2013-12-10/u-s-farmland-prices-may-fall-in-2014-economist-says.html

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Terry Kastens at KansasStateUniversity said:

Farmland values are about to stop rising rapidly, flatten out or even fall 10 percent or so, but will not crash.

Rising global crop output and stable renewable-fuel standards are leading to a flattening in commodity prices.

Rents in some areas may ease in 2014, with possible big drops in Iowa and Illinois if rents are negotiated every year based on forecasts for crop prices. Rents may rise in

riskier growing regions including the High Plains because gains during previous crop rallies were moderate.

Land sales by farmers have climbed because producers with ample cash are still buying, while demand by investors eased amid concern that the market may have peaked.

Farmland prices may jump if commodity prices surge, sending corn back to $7.

We may see higher rents and higher property values in 2 o 10 years if crop output has massive consolidation, and large companies are able to pay higher prices.

No Young People Are Going Into Agriculture – Jim Rogers On The Markets 11-26-13

Salient to Investors:

Jim Rogers said the world has consumed more than it has produced for the last decade so inventories are near historic lows. Plus we are running out of farmers: the average age of farmers in America is 58, in Japan is 66 and no young people are going into agriculture.

Read the full article at http://jimrogersonthemarkets.blogspot.com/2013/11/no-young-people-are-going-into.html

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Jim Rogers: Biggest Event of Next 10-20 Years Just Happened in China – Moneybeat 11-18-13

Salient to Investors:

Jim Rogers said:

  • The most important economic event of the next 10 to 20 years is what happened in Beijing, though largely ignored, particularly by the Western media.
  • Current efforts to reform, if followed through, could take a generation to really bear fruit but Chinese agriculture, railroads, medical care and defense are attractive investments, even if the country’s stock market collapses
  • Buying Chinese stocks, including financials, for the first time since 2008.
  • The overriding concept from the plenum is “when in doubt, the market will decide.” Policy makers seem to have the wind at their back and leaders have put a lot of prestige on the line.
  • Talk about China’s economy being a bubble or that its ascendance will end is reminiscent of what Europeans said about the US after the Civil War. And within a generation after WWI, the undisputed No. 1, the United Kingdom, was no longer that.

Read the full article at http://blogs.wsj.com/moneybeat/2013/11/18/jim-rogers-biggest-event-of-next-10-20-years-just-happened-in-china/

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China has great potential in agriculture – Jim Rogers Blog 09-24-13

Salient to Investors:

Jim Rogers writes:

  • The world is short of agriculture products, the agriculture population is reduced sharply, and the average age of global farmers is too high.
  • China has great potential in agriculture, creating an opportunity for agriculture investors.

Read the full article at  http://blogjimrogers.blogspot.com/2013/09/china-has-great-potential-in-agriculture.html

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GMO’s Jeremy Grantham on Climate Change and Investable Ideas – BloombergBusinessweek 08-08-13

Salient to Investors:

Jeremy Grantham said:

  • The biggest issue we face is deterioration of the environment, particularly climate damage. In the US, the biggest problem is coal and tar sands.
  • If we burn half or more of the coal and tar sands in two areas in North America, there is no chance of avoiding very dire consequences: rising water levels displacing hundreds of millions of people globally, destabilizing global politics, acidification of the water almost certainly destroying most of the coral reefs, and possibly threatening the bottom of the food chain in the ocean.
  • In the investment business, our No. 1 job is not managing money but keeping our job, which is why short-term momentum investing dominates. Scientists do the same and make sure they’re conservative.
  • Young people are not flocking quite so enthusiastically to the financial world. They haven’t responded to climate change despite it happening so fast that this is their lives, not their children’s.
  • The only investable idea I have confidence in is farming and forestry.
  • Holistic is the world’s most pretentious word.
  • We have been manipulated to see ourselves in a world where only debt matters, only finance matters, only banking matters and therefore we have to be protective of the big banks.
  • The US will prosper by the quality and quantity of our labor and capital. How the Fed twitches around has no material effect.
  • I try not to miss the big ideas and forget the little ones.

Read the full article at  http://www.businessinsider.com/jeremy-grantham-on-the-fed-2013-8

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Jim Rogers Wary On The U.S. Bull Market — Agriculture Shines But Fracking Could Flop – Financial Advisor 07-25-13

Salient to Investors:

Jim Rogers said:

  • Agriculture will enjoy an extended boom,Very bullish about farmland and other agricultural products.
  • Bearish on Wall Street brokers and Ivy League professors.
  • The central corridor from north Texas up to the Dakotas has the highest growth rates in employment, income growth and savings in the US, and is the only region whose primary limits to growth are supply and capacity constraints.
  • A global shortage of farmers could become serious since most farmers in the US, Japan and elsewhere are in their 60s or older and young people are not entering the business – more Americans are graduating with degrees in public relations than in agriculture.
  • Gold is experiencing a complicated bottoming process.
  • The 30-year bull market in bonds is over and likely to be followed by a bear market of similar duration.
  • No bull market in any asset class goes on forever.
  • The bull market in US equities is getting close to ending in a big mess, worse than 2001 and 2008-2009.
  • Global central bank promiscuity virtually ensures turbulence and tough times will follow.
  • Shorting shorting junk bonds as the riskiest assets will get hurt the most when the central banks’ house of cards collapses.
  • Bullish on Russian stocks, especially because it is the second most hated market after Argentina.
  • Bearish on fracking because rig usage is down 75 percent and pumps are down 50 percent over the last 2 years, and most oil shale well production declines very rapidly after the first year or two.
  • Water is a more attractive commodity, but don’t own it as politicians will hang you in the public square. Better to transport, clean or filtrate it and be a hero in the public square.

Read the full article at  http://www.fa-mag.com/news/jim-rogers-wary-on-the-u-s–bull-market-agriculture-to-shine-while-fracking-could-flop-14984.html

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Record Profits No Job Creator on Farms as Owners Automate – Bloomberg 01-29-13

Salient to Investors:

These are boom times for farming and a bust for farm jobs. The Bureau of Labor Statistics said farmers, ranchers and other agricultural managers will see the steepest decline of any employment category by 2020.

David Anderson at Texas A&M said one-quarter of farms have sales under $100,000 annually and don’t need a full-time manager, while larger farms are more easily overseen by one person.

Kristi Boswell at the American Farm Bureau Federation said greater farm prosperity will increase the trend toward more automation and fewer managers, while ever-larger farms need fewer people.

Read the full article at http://www.bloomberg.com/news/2013-01-30/record-profits-no-job-creator-on-farms-as-owners-automate.html

 

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Exports to Recover in U.S. as Global Growth Firms: Economy – Bloomberg 01-23-13

Salient to Investors:

Exports from the US are set to pick up in 2013 as global growth strengthens. Gary Hufbauer at Peterson Institute for Intl Economics said competitive US industries include agriculture, medical supplies and aviation, and exports are a very high-paying sector of the US economy – jobs are more steady in export-oriented companies, which pay better and do more R&D.

The World Bank says developing nations will grow 5.5 percent in 2013 while Europe stabilizes, and Latin America will grow 3.5 percent versus 3 percent in 2012 and led by Brazil.

Maury Harris at UBS Securities said the rest of the world is still growing, and expects exports to rise 6.7% in Q4 versus Q4 2012. UBS expects foreign demand to grow at a 6% pace in Q1 and 7% pace for the rest of 2013.

The IMF expects developing economies to grow 5.5% in 2013 versus 5.1% in 2012, and the world to grow 3.5% as Europe shrinks for a second year.

The Institute for Supply Management’s export index exceeded the break-even 50 level in December for the first time since May. UBS says this index’s 3-month average leads similar changes in actual exports by a few months.

Joseph Carson at AllianceBernstein said the US will gain market share in a growing market, in the direction of emerging markets, now 57% of US exports and up 20% over the past decade.

Neil Dutta at Renaissance Macro Research expects US exports to grow 2.3% in 2013 and global demand to firm in half2, but cautioned that Canada, the US’s biggest customer, is cooling. Dutta said Canada’s housing market is cooling, while fiscal tightening in Europe and an Asian rebound that has had little impact outside the region are working against an acceleration in demand for US goods.

Diane Swonk expects overseas demand to pick up in half2, US exports to grow 5.1% in 2013 as China recovers and Europe stabilizes, and sales overseas to grow 8.7% in 2014. Swonk said the first wave for developing nations is importing goods such as automobiles that require time to produce domestically, and from American companies.

Read the full article at http://www.bloomberg.com/news/2013-01-23/exports-set-for-recovery-in-u-s-as-global-growth-firms-economy.html

 

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