Posts Tagged ‘agriculture stocks’

Burning the Food Supply

Burning the Food Supply

Courtesy of Joshua M Brown, The Reformed Broker 

Farmer Brown here…if no one else is going to tell this story, then I might as well.

We do some stupid stuff here in America – playing ultimate frisbee on skis, deep-frying Oreos, calling in to vote for televised dance show contestants…I could go on and on.

But of all the stupid things we do, one of the most dangerous is this ethanol nonsense, in which we gleefully burn up our corn supplies.  For very little in the way of environmental impact I might add.

First, look at the December 2010 corn contract, then I’ll give you some insane stats on the demands of ethanol:

You wouldn’t believe it, but according to the most recent estimate from the USDA, corn use for ethanol for the 2010-2011 corn crop will be 37 percent of the projected total harvest.  More than a third of our corn supply will be refined for energy use.  We’re talking about 4.7 billion bushels of the corn that would normally go to animals as fodder and to our own diets.

And while yields and production are up, corn races to ever higher prices.  There’s a good reason for that – industry experts say that we now need to produce 13 billion bushels each year just to keep prices restrained.

The stats above are mind-blowing and to me they represent the bull case for agriculture stocks and commodities in general.

They also represent a society that has become oblivious to the danger right in front of its face.  I believe that resource competition between the developed and emerging nations is a given for the coming decade.  While many believe this competition will center around oil, I’d be more concerned about the global demand for more and better food.

One of the most important determinants of animal protein prices is the corn fodder that supports production.  And we’re mixing this critical element of the food supply into our gas tanks.

One might ask "but if it comes down to it, we can adjust in time, right?"

And the retort might be "if we’ve learned anything from the economic earthquakes of the recent past, it’s that we almost never adjust until it’s too late."

Stupid, stupid, stupid.

h/t David D 


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Is Monsanto Worth a Look? Depends on Which Monsanto You’re Talking About.

Is Monsanto Worth a Look? Depends on Which Monsanto You’re Talking About.

Disclaimer:  This is not research, advice or an invitation to trade or invest.  My comments below are simply some observations based on publicly available information.  Do not trade based on anything you read here.

Monsanto (MON) is becoming quite the controversial stock in light of the dichotomy of near-term and long-term outlooks.  You could make the case that this is true for all of the agriculture stocks (brutal farm incomes and spending this year but multi-year Ag Supercycle on the horizon). 

Roundup - the trouble with Monsanto

Let’s look at MON as a microcosm for the ag story at large…

Monsanto’s long-term story is one of the most exciting and imagination-capturing I can think of.

The short version goes something like this: 

The planet’s population is not only growing, it is becoming more prosperous.  As a result, the emerging middle class (China, Latin America, India, Africa) will be looking to upgrade the food they consume and to include more proteins in their diet.  In order to meet this new protein demand, roughly four times the amount of productivity will be required of the available global farmland.  The best way to accomplish this is with enhanced seed and genomic technology, which puts the industry leader, Monsanto, squarely in the driver’s seat for this global mega-trend.

OK, this is all well and good, but right now in 2009, the $43 billion dollar company is not quite being driven by the Ag-Tech story, it is instead being driven in part by the results of its weed-killer business, also known as Roundup.

Monsanto put out an earnings forecast this week and had to lower its 2009 and 2010 profit estimates in light of the fact that consumers are skipping the brand-name Roundup product in favor of cheaper generic herbicides.

roundup on monsantoThe company is pegging its 2010 earnings at $3.10 to $3.30 a share, The Street was thinking more like $4.30.  Not pretty.

Monsanto’s CEO is telling us that the Roundup business will only be 15% of the profit mix at Monsanto by 2012 as the seed and genomic businesses kick into high gear and go to 85% of profits.  The question becomes whether or not you are willing to see through the valley into the intermediate term when this prospect has the potential to become reality. 

The analysts I’ve…
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Animal Spirits: The Richest 50%

 

Animal Spirits: The Richest 50%

Courtesy of 

Today’s Animal Spirits is presented by YCharts. Mention Animal Spirits to receive 20% off (*New YCharts users only).

On today’s Animal Spirits we discuss:

...



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Zero Hedge

China Injects Gargantuan 1.1 Trillion In Liquidity This Week

Courtesy of ZeroHedge. View original post here.

Following what Bloomberg calculated was a record net reverse repo liquidity injection on Wednesday, when the PBOC injected a whopping 560 billion yuan of liquidity into the financial system via open market operations, the Chinese central bank has done it again and in Thursday's open market operation, it sold 250BN yuan in 7 Day repos (slightly below yesterday's record 350BN), and 150BN in 28 Day repos, which net of maturities resulted in a whopping net 380BN yuan ($56.2BN) liquidity injection.

...



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Kimble Charting Solutions

The "Average Stock" is Facing a Big Test Here!

Courtesy of Chris Kimble.

The Value Line Geometric Index tends to give investors a good idea of the health of the overall market. It is an equal-weighted index with a broad swath of stocks that gives investors an idea of how the “average stock” is performing.

The Value Line Geometric formed highs in the same area in 1998, 2007, and 2015 (see blue line). In the last two years, the index broke out above that line and held above it until the recent correction.

It is now testing the underside of that price area (now resistance). Bulls will get good news with a breakout ABOVE thi...



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Digital Currencies

Crypto-Bubble: Will Bitcoin Bottom In February Or Has It Already?

Courtesy of Michelle Jones via ValueWalk.com

The new year has been relatively good for the price of bitcoin after a spectacular collapse of the cryptocurrency bubble in 2018. It’s up notably since the middle of December and traded around the psychological level of $4,000... so is this a sign that the crypto market is about to recover?

Of course, it depends on who you ask, but one analyst discovered a pattern which might point to a bottom next month.

A year after the cryptocurrency bubble popped

CCN...



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ValueWalk

D.E. Shaw Investment Calls For Leadership Change At EQT

By ActivistInsight. Originally published at ValueWalk.

Elliott Management has offered to acquire QEP Resources for approximately $2.1 billion, contending the oil and gas explorer’s turnaround efforts have done little to lift the company’s share price. The company responded and said that a thorough review of the proposition is imperative in order to properly act in the best interests of shareholders, “taking into account the company’s other alternatives and current market conditions.” The news came only a month after Travelport Worldwide agreed to sell itself to Siris Capital Group and Elliott’s private equity arm Evergreen Coast Capital for $4.4 billion in cash and two months after Athenahealth was bought by Veritas and Evergreen for $5.7 bi...



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Insider Scoop

UBS Says Disney's Streaming Ambition Gives It A 'New Hope'

Courtesy of Benzinga.

Related DIS Despite Some Risks, Analysts Still Expecting Double Digit Growth From Communications Services In Q4 ...

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Chart School

Weekly Market Recap Jan 13, 2019

Courtesy of Blain.

In last week’s recap we asked:  “Has the Fed solved all the market’s problems in 1 speech?”

Thus far the market says yes!  As Guns n Roses preached – all we need is a little “patience”.  Four up days followed by a nominal down day Friday had the market following it’s normal pattern the past nearly 30 years – jumping whenever the Federal Reserve hints (or essentially says outright) it is here for the markets.   And in case you missed it the prior Friday, Chairman Powell came back out Thursday to reiterate the news – so…so… so… patient!

Fed Chairman Jerome Powell reinforced that message Thursday during a discussion at the Economic Club of Washington where he said that the central bank will be “fle...



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Members' Corner

Why Trump Can't Learn

 

Bill Eddy (lawyer, therapist, author) predicted Trump's chaotic presidency based on his high-conflict personality, which was evident years ago. This post, written in 2017, references a prescient article Bill wrote before Trump even became president, 5 Reasons Trump Can’t Learn. ~ Ilene 

Why Trump Can’t Learn

Donald Trump by Gage Skidmore (...



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Biotech

Opening Pandora's Box: Gene editing and its consequences

Reminder: We are available to chat with Members, comments are found below each post.

 

Opening Pandora's Box: Gene editing and its consequences

Bacteriophage viruses infecting bacterial cells , Bacterial viruses. from www.shutterstock.com

Courtesy of John Bergeron, McGill University

Today, the scientific community is aghast at the prospect of gene editing to create “designer” humans. Gene editing may be of greater consequence than climate change, or even the consequences of unleashing the energy of the atom.

...

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Mapping The Market

Trump: "I Won't Be Here" When It Blows Up

By Jean-Luc

Maybe we should simply try him for treason right now:

Trump on Coming Debt Crisis: ‘I Won’t Be Here’ When It Blows Up

The president thinks the balancing of the nation’s books is going to, ultimately, be a future president’s problem.

By Asawin Suebsaeng and Lachlan Markay, Daily Beast

The friction came to a head in early 2017 when senior officials offered Trump charts and graphics laying out the numbers and showing a “hockey stick” spike in the nationa...



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OpTrader

Swing trading portfolio - week of September 11th, 2017

Reminder: OpTrader is available to chat with Members, comments are found below each post.

 

This post is for all our live virtual trade ideas and daily comments. Please click on "comments" below to follow our live discussion. All of our current  trades are listed in the spreadsheet below, with entry price (1/2 in and All in), and exit prices (1/3 out, 2/3 out, and All out).

We also indicate our stop, which is most of the time the "5 day moving average". All trades, unless indicated, are front-month ATM options. 

Please feel free to participate in the discussion and ask any questions you might have about this virtual portfolio, by clicking on the "comments" link right below.

To learn more about the swing trading virtual portfolio (strategy, performance, FAQ, etc.), please click here ...



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Promotions

Free eBook - "My Top Strategies for 2017"

 

 

Here's a free ebook for you to check out! 

Phil has a chapter in a newly-released eBook that we think you’ll enjoy.

In My Top Strategies for 2017, Phil's chapter is Secret Santa’s Inflation Hedges for 2017.

This chapter isn’t about risk or leverage. Phil present a few smart, practical ideas you can use as a hedge against inflation as well as hedging strategies designed to assist you in staying ahead of the markets.

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About Phil:

Philip R. Davis is a founder Phil's Stock World, a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders...

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