Tag Archive | DBA

Three ETFs Potentially Impacted By Floods In Brazil

Brazil is currently suffering from of one its worst ever natural disasters after extensive rainfall and flooding has caused massive mudslides and killed many people, potentially having an impact on production of coffee and sugar in Latin America’s largest economy.

According to BBC News, harsh storms in the nation dumped the equivalent of one month’s rainfall in just a few hours on Wednesday, sending mudslides ragging through towns, destroying homes, roads, and bridges, while taking out power and telephone lines.  Worst of all, municipal offices in the Serrana region, just north of Rio de Janeiro, have reported that death tolls as a result of the mudslides have surpassed the 500 mark and continue to grow.  Read More…

5 ETFs To Hedge Against Inflation

As the US government has resorted to excessive spending measures to keep the economy from completely crumbling, many investors suggest that inflation is inevitable and could even prevail in the coming months. 

Current economic data suggest that inflation is running lower than expected; however there are numerous reasons to think that inflation will eventually be inevitable.  Some of these reasons include the Federal Reserve’s implementation of QE2, which launched in early November, the increases in money supply in the earlier stages of the Great Recession to ignite a spark in the US economy and rising commodity prices are likely to take their toll on the consumer price index (CPI).  In fact, rising prices have already started to emerge, evident through the recent rise in energy prices (i.e. crude oil and gasoline), food prices (i.e. wheat, sugar, coffee and soybeans) and airline tickets.  Read More…

Four ETFs Impacted By Increasing Food Prices

The global price of food continues to increase illustrated by the United Nations Food and Agriculture Organization’s monthly food price index rising to 214.7, the sixth consecutive month that the index has risen as supply and demand  imbalances continue to take their toll on food prices. 

Demand for food continues to rise as wealth in developing nation like China, India and Brazil has elevated food consumption as consumers in these nations starve of their traditional eating habits and seek more of a Western-style diet. This elevated demand, combined with supply constraints, has provided positive price support to commodities like corn, wheat, coffee and cotton and cooking oils. Read More…

Looming Sugar Shortage Launches Sugar ETFs

On Friday, concerns over future supplies of sugar pushed prices up to their highest levels since November 10th as inclement weather in the US and declining output in Brazil pave the path to projected shortages on the supply side of the commodity. 

Mother Nature is delivering one of the coldest weathers in the past decade throughout parts of the United States causing freezing temperatures in Florida to severely damage sugarcane crops and limit future production of sugar.  Read More…

Three ETFs To Play Rising Grain Prices

Heavy rain in Australia and dry weather in the US are expected to take its toll on global grain production, pushing prices up and providing positive support to the iPath DJ-UBS Grains TR Sub-Idx ETN (JJG), the ELEMENTS MLCX Grains Index TR ETN (GRU) and the PowerShares DB Agriculture Fund (DBA).

To further add to grain’s appeal, the supply and demand imbalances of global grains are expected to widen as competition amongst major crops for limited acreage amplifies, weather conditions continue to take their toll on global production and demand increases due to population growth and increased global wealth.   In fact, the United Nation’s Food and Agriculture Organization expects global wheat stock levels to drop by 10% from last year to 181 million tons.  Read More…

India Supply Concerns Boost Sugar ETFs

Heavy rainfall and inclimate weather have taken its toll on India’s second largest producing state having many investors worried that global supply for sugar will not meet demand sending prices higher and providing positive price support to the iPath DJ-UBS Sugar TR Sub-Idx ETN (SGG), the PowerShares DB Agriculture Fund (DBA) and the UBS E-TRACS CMCI Agriculture TR ETN (UAG).

Elevated demand for sugar has resulted in a diminishing supply of global sugar stock levels, pushing levels to their lowest point in 20 years and prices of raw sugar prices back up towards their 30-year high levels.  Furthermore, yields in Uttar Pradesh, which is India’s second largest sugar producing state, have been cut enhancing fears that India may not produce the expected 25 million ton crop that the global market place has been hoping for, reports Caroline Henshaw of the Wall Street JournalRead More…

Four ETFs To Play Global Food Demand

Agriculture prices have surged this year as demand for grains, dairy, meats and cooking oils have elevated in emerging markets and supply has remained constrained enabling the Market Vectors Agribusiness ETF (MOO), UBS E-TRACS CMCI Food TR ETN (FUD), iPath DJ-UBS Agriculture TR Sub-Idx ETN (JJA) and the PowerShares DB Agriculture Fund (DBA) to reap the benefits. 

On the demand side, increased wealth in nations like China, India and Brazil has elevated food consumption as consumers in these nations starve of their traditional eating habits and seek more of a Western-style diet.  This elevated demand, combined with supply constraints, has already driven up the prices in commodities like corn, wheat, coffee and cotton and now is aiming to hit cooking oils. Read More…

Three ETFs To Play Coffee’s Supply Concerns

Heavy rainfall have many concerned about coffee supplies, pushing the agriculturally-based commodity to its highest levels in more than 13 years giving positive price support to the iPath DJ-UBS Coffee TR Sub-Idx (JO), the PowerShares DB Agriculture Fund (DBA) and the iPath DJ-UBS Agriculture TR Sub-Idx ETN (JJA).

Coffee futures for December delivery recently broke $2 per pound as a string of storms in the Caribbean dumped huge amounts of rain over South and Central America resulting in lower crop yields and destruction of the quality of existing coffee beans.  This shortage in coffee beans, more specifically Arabica beans, is causing many to shore up on stockpiles to meet demand. Read More…

Supply Woes Could Boost Sugar ETFs

With enhanced uncertainty in the use of genetically modified seeds to produce sugar in the U.S., a supply and demand imbalance in sugar could provide positive price support for the iPath DJ-UBS Sugar TR Sub-Idx ETN (SGG), the PowerShares DB Agriculture Fund (DBA) and the UBS E-TRACS CMCI Agriculture TR ETN (UAG).

According to Bill Tomson of the Wall Street Journal, earlier this year, a judge threw out the USDA’s initial approval for the use of genetically modified seeds to produce sugar-beet.  According to the USDA, this could potentially hinder U.S. sugar production by nearly 20 percent as that genetically modified beets have come to account for 95 percent of the U.S. sugar-beet crop in the past five years and the abstinence of these seeds will force the use of traditional sugar-beet seeds.  Read More…

Four ETFs To Play Corn’s Shine

As supply and demand imbalances continue to take their toll on corn and other agricultural products pushing prices of these commodities higher, the path to prosperity could potentially be paved for the the Teucrium Corn (CORN), the PowerShares DB Agriculture Fund (DBA), the PowerShares Global Agriculture (PAGG) and the Market Vectors Agribusiness (MOO).

Recently, the US Department of Agriculture released a report illustrating that corn yields are lower than expected resulting in downward revisions to future crop estimates, pushing prices of the sough after commodity north of $5 per barrel.   In fact, the USDA projects that in 2011, supplies as a percentage of usage would be at their lowest level in 15 years.  Furthermore, grains have already been hit by a supply shock earlier this year by the severe drought seen in Russia. Read More…

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