Investing in Agricultural Stocks

LC Lauren Conrad Jammies For Your Families Fairisle Pajamas
Featuring a festive tree and snowflake fairisle print, your holiday hive will love wearing these LC Lauren Conrad Jammies For Your Families pajamas.

Esprit Charlotte Women's Gladiator Sandals
A demi-wedge heel lends just the right amount of height to these Charlotte sandals from Esprit.

The last few months in the market have been quite nerve racking. Stock prices are bouncing up and down like a basketball in a high school gym class. Dow 14,000 … Dow 13,000 …. Dow 14,000. The 200 and 300 point wings we see every day make picking the right stock all the more important.

As we discussed earlier this week, banking stocks have been destroyed and are setting themselves up for more of the same. Energy stocks continue to rally as oil prices consistently push to new highs, and the salivating press drools more each day as we near $ 100 per barrel. Technology stocks which have shown considerable strength in the last few weeks, have recently suffered a slide of their own. This leaves many investors on the sidelines asking the question:

"Where is today's growth market?"

I think I have the answer to that, but first a little background.

Commodity prices across the board are rallying. Gold is over $ 800 and is on its way to who knows where. Silver meanwhile has crossed $ 15 per ounce. All of the news looks to be about oil approaching the $ 100 dollar a barrel level, and natural gas futures reaching new highs. What is lost in the information overload is that the more common commodities are also reaching new highs. Corn is a mere 12% from its highs reached earlier this year.

Wheat prices are double the previous highs achieved in the last decade.

Soybeans, oats, barley …. the list goes on of agricultural commodities that are reaching new 52-week or lifetime highs. Increasing demand for commodities is driving many agricultural stocks to new highs. Look at Deere & Co. (DE), a leading supplier of farm and forestry equipment throughout the world. The stock has been hitting new highs for the last few years as their business performance has been nothing short of spectacular.

So, what is driving their business? Let's let Deere CEO Bob Lane explain:

"Farm commodity production, as an example, has been expanding across the world in recent years yet has consistently fallen short of demand.Global carryover stocks of corn and wheat are at 30-year lows in relation

to use. Consumption is being driven by a global population growing in both size and affluence, and by the increasing popularity of renewable fuels. "

Put simply, demand for commodities is growing faster than the supply of those commodities. This is causing prices to rise. When prices rise, the commodity producers – farmers – rush out to plant more crops, and create more supply. To do this they need more equipment, seed, and fertilizer. They need the products that agricultural-related companies are selling.

This demand can not be satiated overnight. It can take several years for a previously unfarmed piece of land to produce high yields of a quality crop. As amazing as it sounds, the agricultural industry is in a period of dynamic growth. Growth which is expected to continue for a few more years at a minimum.

There are a number of companies in the agricultural industry that I like. Deere is only one example of a company benefiting from this growing market. The other major player worth mentioning is Monsanto (MON) which provides seeds and herbicides to farmers in an effort to expand their crop yields.

With the market volatility increasing, I am focusing on fundamental stories and long term growth prospects. For me, the agricultural industry, and the companies supplying to it, have a lot of growth ahead. It clearly describes a very close look.

Boys 10-20 Husky Van Heusen Tuxedo Shirt & Bow Tie
Get him ready for any special occasion with this tuxedo shirt & bow tie set from Van Heusen.

Paper Source "You Are Awesome" Medium Gift Bag
This stunning gift bag features a bold striped design and fantastic message printed in gold foil. What a stylish way to wrap a gift and tell someone they are incredibly awesome!

Men's Apt. 9® Premier Flex Slim-Fit Suit Coat
Instant impression. This men's Apt. 9 suit coat makes an immediate stylish statement with its slim fit and modern design. Stretch fabric and lining deliver all-day comfort.

Baby Boy / Toddler Boy Jumping Beans® Blue's Clues Raglan Graphic Tee
Give him cute Blue's Clues style with this Jumping Beans raglan graphic tee.

Intelligent Design Maddie Shaggy Faux Fur Throw
Stay cozy and look fashionable with this Maddie shaggy faux fur throw.

Men's Champion® White Arkansas Razorbacks Tailgate Packable Half-Zip Jacket
You don't want to let the elements spoil your game day experience, so pick up this Arkansas Razorbacks Tailgate Packable half-zip jacket from Champion.

Men's Hanes Ultimate® 5-pack Exposed Waistband Boxer Brief
Hanes briefs at Kohls.com - Shop our full selection of men's underwear, including these Hanes Classics 5-pk. Boxer Briefs, at Kohls.com.

National Geographic Explorer Series Rock Tumbler
The National Geographic Explorer Rock Tumbler kit is a fantastic way to start an exciting new rock tumbling hobby!

You may also like...