zaterdag 13 december 2014

Has agriculture found a bottom?

The latest interview with Marc Faber (Barron's) sparked an idea with me. In that interview he said that palm oil was going to do well. The palm oil price is very much correlated with the soybean price and we are seeing a rebound in soybeans at this moment, while palm oil hasn't seen a rebound yet. As a Belgian, the best way for me to invest in this idea is to buy shares of Sipef (SIP). These profitable companies will pay dividends of 2%-4%, way higher than what you get in European bonds and cash.

Currently, the low crude oil price has dragged the palm oil business down with it. Why you say? It's all because of the derivatives complex. But we are seeing price reversals in agriculture at this moment. For example, when we look at the overall agriculture commodity index RJA, it is showing a bottom.

Also, potash prices are finally on the rise. We have seen the first uptick move in over more than 3 years and potash companies have seen rebounds as well. So, plenty ideas for your next investment!

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