As markets prepare for another four years of Barack Obama, it is safe to say that trading has been anything but smooth. With most benchmarks suffering a poor string of sessions last week, many are looking to the near-term or have focused on exactly what happened last week. But with commodity investing, it is always important to take a look at longer-developing trends, as they can often signal how a particular asset will perform in the near future [for more softs news and analysis subscribe to our free newsletter].
As we wrap up the third quarter of 2012, many look ahead to finalize their portfolios for the year. By most equity standards, 2012 has been a very successful year, but the same cannot be said for commodities. As always, the commodity industry has picked its darlings and singled out its laggards, making profits for some and drawing up big losses for others. With nine months of the year in the bag, it will be a good time to reassess your holdings to see if it may be the right time to reallocate or if there are more promising opportunities out there [for more commodity news and analysis subscribe to our free newsletter].
The world of commodities was not accessible to most average investors just a few short years ago. But today, there are exchange-traded funds that allow investors to gain exposure to many commodities, both as an asset class and as a way to participate in the movements of an individual commodity, even rather obscure ones, without a futures account.
Sugar has been in production since ancient history. When the crop was first discovered, it was not plentiful, or cheap to grow and harvest, so many populations used honey as a sweetener instead. However, during various agricultural revolutions, and major improvements in farming techniques and technology, sugar became a widely used commodity. As far as food is concerned, the term “sugar” most often refers to sucrose, which comes from sugarcane or sugar beet. Though this sweet crop is most known for giving our food a more enjoyable flavor, it has a wealth of other uses, including lightening skin discoloration, and alternative fuels. Roughly 20% of the total supply of sugar will end up in what is known as the “dump market”, where governments provide subsidies for producers to sell their surplus supplies for a price much lower than the cost of production. Sugar has become a popular buy among investors, … See the full story here
Cotton is a crop that has been around for centuries and has been important to numerous civilizations throughout history. The crop is most often spun and woven into yarn or textiles to be worn as clothing. In fact, historical evidence suggests that cotton clothing has been around since prehistoric times, and it continues to be an important commodity today. Cotton is the main component of many of our shirts, towels, bed sheets, jeans, socks, underwear, etc. The fluffy commodity is also a popular investment for numerous traders. Cotton has the potential to serve as a useful hedge against inflation, and can also be used for profit during strong economic times, or during times of high demand for raw materials. There are a number of different options to invest in cotton, including futures contracts, stocks of companies engaged in cotton production or planting, and ETFs [see also The Guide To The … See the full story here
Coffee beans are in fact the seeds of the coffee tree, but are referred to as beans because of their striking resemblance. The coffee plant itself is actually a fruit, and its end product is one of the most widely consumed beverages in the world. In fact, the crop is so popular, that over 2.25 billion cups are consumed daily around the globe; that’s enough to give one cup to one third of the world’s population. The farming of coffee beans began nearly 3,000 years ago, and was first introduced to the Americas in the early 1700’s. The beans are typically handpicked once the fruit is ripe, and the processing and cultivation of this crop occurs all around the world. As an investment, coffee has become a popular go to source for investors to make a play on economic trends. With such a large global reach, news from any part … See the full story here