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Investing in Commodities
Most of us Americans are so accustomed to a world of plenty; we have a hard time imagining a world of scarcity — much less making investments based upon this idea. But the energy markets provide a very powerful example of what happens when resources become less plentiful.
Five years ago, almost no one believed that oil prices would soar past $30 per barrel. $50 seemed utterly unthinkable. As oil prices continued climbing, so did disbelief. The skeptics never abandoned their misguided notion that oil was “overpriced.†So when crude retreated from $75 to $50 early last year, the prospect of…
23Jun2008 | The Penny Sleuth | Comments Off | ContinuedCorn Rises for Eighth Straight Month, Pitting Ethanol Use Against Global Hunger
Against a backdrop of soaring worldwide food prices, riots over shortages and controversies about food crops being diverted for biofuels, U.S. corn prices jumped another 7% in April, the eighth-straight monthly advance.
And the worst may be yet to come: Despite the rocketing price of corn and calls to step up production of corn-based ethanol, farmers intend to devote a bigger percentage of their acreage to more-profitable crops such as soybeans and wheat.
“Compared with soybeans and wheat, corn is still bullish as people expect the acres in the U.S. will fall following planting delays,” Kenji Kobayashi, a grain analyst at Kanetsu…
1May2008 | Money Morning | Comments Off | Continued
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