Get Ready for the Bounce

• Report this Comment On August 11, 2008, at 1:58 PM, midwest1313 wrote:

  We will see what tomorrow's USDA Agriculture report say's about estimated corn and soybean yields. If the USDA claims that yields will continue to exceed expectations despite Iowa and Illinois's 5 year low in crop maturity, well then maybe the government is influencing the commodity market before the election. If not, then speculators can be blamed for the corn and oil prices surging out of control in 2007 and 2008.

• Report this Comment On August 12, 2008, at 2:44 PM, federico7518 wrote:

  According to your valuation CRESY is worth USD 432 per acre owned. That is even very cheap for Argentine land prices.

  Cattle raising is not profitable in Argentina at this moment. Agriculture despite export taxes is still making money.

  Thanks to a populist government, the macro picture is deteriorating fast.

  I would bet for a bounce but it is better to find another player like MOS, BG, POT, MON, SYT

• Report this Comment On August 15, 2008, at 3:20 PM, hockeypop wrote:

  Sure, what could go wrong -- taxes, revolution, labor disputes, confiscation of property, problems getting grain to the yards or OUT of Argentina, and the usuals -- bad weather, insects, blight, increased costs (like their own oil, being sold elsewhere) or a much further drop in world prices. There is a reason that ag has been traditionally undervalued -- it's the toughtest investment in the world to predict short-term. Obviously this is NOT for those with short pants.

• Report this Comment On September 11, 2008, at 3:53 PM, breathless9 wrote:

  Surprised you even mentioned the stock with the "froggy" name. Only the fact that I bo't a mere 100 shares of Froggy

  keeps me from screaming Turkey! Turkey!

  First this outfit merges with other mining companies, cutting stock equity in half. Then it issues convertible debentures to finance what it could not afford to do on its own.No wonder it's reaching penny stock status.

• Report this Comment On September 18, 2008, at 8:41 PM, gamma65 wrote:

  Agriculture, farmland and food supply questions are even more politically charged than questions of energy and energy sovereignty. Recent events in Argentina show that investors seeking exposure to farmland as an investment class must pay extremely careful attention to political risk when they are making their decisions on where to deploy capital. Getting expsosure to farmland in politically stable regions with good infrastructure at reasonable prices will be a key return determinant.

  On a more general note, the asset class looks very promising. The equity and bond markets have benefited from a long period of low inflation, but ongoing and massive central bank liquidity injections point to a far less benign environment of elevated inflation ahead. Research by Agcapita Farmland Investment Partnership (Calgary based farmland private equity firm) shows investors should now be considering rotating into asset classes with different characteristics.

  During the last commodity bull market & high inflation period in the 1970’s, equities materially underperformed farmland. Western Canadian farmland went from around $100/acre to $550/acre (550% total return and 176% in inflation adjusted terms), cash held in a money market account barely kept ahead of inflation (6% inflation adjusted return) and the S&P 500 index returned less than 2% per year (a loss of almost 50% in inflation in adjusted terms)

  I believe the world is still in the early stages of this current commodity bull market. When agriculture commodities prices are compared against their previous inflation adjusted highs they are significantly discounted implying scope for further increases:

   Corn is US$ 5/bushel currently compared to US$16/bushel in 1974,

   Wheat is US$ 7/bushel currently compared to US$27/bushel in 1974

   Western Canadian farmland is C$ 660/acre currently compared to C$1,100/acre in 1981

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