Two Ways To Play: There Was a Farmer Who Had Some Dough...

Terry Woo  Aug 04, 2008 4:56 pm

Two Ways To Play: There Was a Farmer Who Had Some Dough...
 
Strengthen your portfolio in good times and bad.
 

 
Bloomberg reports farmland values in the U.S. are at a record despite the worst housing crisis since the Great Depression. The Department of Agriculture said today in an annual report that the value of all land and buildings on farms averaged $2,350 an acre at the start of this year. It marked a 9% increase from the year before.

The farmland boom is a reflection of surging commodity prices. In the last year wheat futures soared 77% on the Chicago Board of Trade while soybeans and corn rose 78% and 17% respectively. This increase is expected to push net farm income to $92.3 billion this year, up 4% from $88.7 billion the prior year.

For context on the commodity space, read Professor Ryan Krueger’s Commodity Bull Run Not Over.

From the Bull Pen: For those bullish, one option can be to fade (read: buy) Potash (POT) as the stock falls to its 200 DMA. Sell-stops can be set below $165.

From the Bear Cave: Ag bears can play the downside using the Ag ETF (DBA). It’s mostly bears that live below the 200 DMA ($36.25). Buy-stops can be set above that level.
Rate this article: (0 Votes)
Comments (2) See All Comments »
08-04-2008, 5:17 pm
These numbers need to be seen in context of the local.
My property assessment doubled this year for land values. Maybe it's a seller's market after all.
I'm afraid it's based on developers buying land that they wi
Read More
08-05-2008, 7:39 am
One needs to remember that the ag "boom" is driven by the ethanol subsidy, without which a drop of around 30% in commodity prices can be expected. The so called step-up in living standards is some farm trade associations dream. China was
Read More
discuss this article and more on the mv exchange
No positions in stocks mentioned.

Get real-time options trading ideas from Steve Smith, veteran options trader and newsletter author, plus let him show you the way to cut risk and boost your returns through the strategic use of options.  Click here for a free 14 day trial to OptionSmith by Steve Smith.



Terry Woo is an Editor at Minyanville Publishing & Multimedia, LLC.

The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any article or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

Copyright 2009 Minyanville Publishing and Multimedia, LLC. All Rights Reserved.

Markets

our professors

rss article alert