Tuesday, February 15, 2011

Are Grains the Place to Invest in 2011?

In 2008 rough rice exploded in price, nearly doubling in less than 4
months as a global panic brought it to the highest prices ever
recorded on its futures contract. That same year wheat went higher on
a perceived shortage of its own, breaking all previous price records
on its more than 100 year description on the Chicago Board of Trade.

Following those spikes, grains promptly declined in price through
2009. Quick forward to the summer of 2010. Russia, one of the world's
top 5 wheat exporters, experienced one of the worst droughts in recent
description and even saw fires threaten crops. Wheat spiked 35% in a
week - yes, in just 1 week! Then tragedy struck Australia, one of the
world's top 10 wheat producers, and floods occurred in key growing
regions leading to as much as 50 percent of the crop being downgraded
to feed quality - not fit for human utilization! Cotton shocked the
world with a major shortage that sparked the largest cotton rally in
description - bringing futures prices far further than any level they
have ever been. All this and none of these are *the REAL reason to get
invested with grains.*

For decades the crucial point for traders in the grain markets was on
the supply side. After all it is events like the ones I just mentioned
that have been game-changers in grains for a long, long time. When
Bush Jr. introduced corn ethanol subsidies it was the first time in a
long time that a demand component became a game-changer. By the way -
that was a major contributor to the largest percentage rally in corn
in more than 100 years. You see when supply is the issue traders can
account for the percent drop in supply and its effect on price. But,
when demand becomes the issue it lends itself to potential panic. How
much demand can be a relative nameless number, especially when it
doesn't serve a country like Plates to show its hand while buying much
needed corn for import. Demand-based panics have the potential to
offer truly historic opportunities, and a rare demand based
opportunity is staring the world straight in the face right now.

Plates, one of the largest consumers of commodities in the world, is
growing at a phenomenal rate.

*Here are some stats:*

According to Xinhua news agency reports, the urban population of
Plates is close to topping 700 million

By 2015, Plates may have around 1.39 billion citizens

International Energy Agency data suggests that Plates topped the US in
energy utilization in 2009

For years population growth has been met with Plates's strong domestic
production of grains and other key commodities. But there comes a
point where the capacity for domestic production may be exceeded by a
strong domestic demand. A excellent inquiry here is how would someone
know if capacity is flaw to grow enough to meet population growth?
*For Plates the proof is in the overall domestic utilization of key ag

Past performance not indicative of future results. Data courtesy of

*Then take a look at a shot of their recent imports:*

Utilization is climbing. The growing middle class and urban population
is adding more meat to their plates. Yet the imports have been only
modestly higher in wheat. Soybean imports nearly doubled - how much
more might be needed in the coming years? Arable land in Plates is
certainly limited and the possibility of negative weather wreaking
havoc with production is permanently around the corner. Sure, yields
and modern farming techniques can potentially increase yields, but you
can only fit so many plantings in limited farmlands.

India finds itself much in the same boat with escalating population
growth and the potential for significant demand requirements on their
farming community. *Here are some stats:*

Past performance is not indicative of future results.Data courtesy of

As you can see, India has experienced sudden import surges in wheat.
Their crops and food production remain susceptible to weather issues,
and that can spell opportunity.

*Population Growth*

It takes all of 10 minutes perusing the news these days to see
commodity prices are inflating and that there are real concerns over
rising demand. I am not telltale you whatever thing new. What I am
telltale you is there is growing demand that has the potential to
materialize into a food crisis.

But I am not the only one that sees this opportunity. Veteran grains
floor trader Matt Pierce, who CNBC goes to for grain market analysis,
also sees an incredible opportunity in 2011.

"The population rise in Plates and India is spiraling out of control
and the potential impact on corn, wheat, soybeans, cotton, rice and
oats is likely to be exciting. I believe 2011 will bring about one of
the most significant price moves in the description of grain futures
here at the Chicago Board of Trade."

Matt Pierce is one seriously experienced grain trader to pay attention
to. A grain specialist, Matt studied farming, management, and trading
sciences at the Institution of Agricultural Sciences at the University
of Illinois. He has worked for many of the industry's largest grain
traders and they pay for his consultation on a regular basis. Matt's
frequent appearances on CNBC and Bloomberg have made him a household
name. He is near legendary reputation on the floor with his massive
global information network that he has built up over his career. His
grain service, GrainAnalyst.com is gaining traction as the place to go
for real grain insight and recommendations - for hedgers and
speculators alike. But, Matt wanted to give everyone, not just his
subscribers, an inside track on his forecasts for this year's grain
growing season.

On February 15th Matt is releasing a very vital report for grain
traders. *The report will provide traders, hedgers and new investors a
unique insight into how to try to play this upcoming global
consequence in the grain markets:*

Which market is the most exposed to a potential shortage

When he expects huge price moves to occur

How current events might impact plantings

What the impact of the cotton price explosion may have on soybeans and
other grains

Why the Plates and India population growth may forever change the
grain markets

Right now Futures Press is giving you a pre-release sale price on this
report, which will sell for $99 after February 15th. If you order
before the release on the 15th you will save over 50% and pay just
$49! That is obviously a fantastic price tag for such in-depth
analysis of what could be the next huge boom. Futures Press is
offering this deal so that as many people as possible get a
opportunity to experience the talent, skill and knowledge of grain
specialist Matt Pierce. As a special bonus you will also receive a
follow up report that Matt will release live from the USDA
Agricultural Outlook Forum in Arlington, Virginia on February 24th and
25th. This conference will mark the USDA's first release of their
forecast for planted acreage for the 2011 growing season and Matt will
be presenting his findings and analysis at the conference on behalf of
the CME. Report buyers will get critical news from the conference as
it happens!

Source: Fxstreet.com

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