Monday, February 1, 2010

Will Agricultural Commodity Prices Rise?

Agricultural Commodity Supply and Demand

It seems on every turn the idea of agricultural commodity prices rising are an illusion rather than a reality, as recent data from the United States Department of Agriculture (USDA) confirms crop production was close to record levels, as supply continues to outstrip demand in the short term.

Even so, agriculture should be a great investment over the long haul, as there is no more land being made and the population of the world continues to grow. There is no way this can be stopped from eventually driving up agricultural prices, as they've been some of the worst performing sectors of all over the last 30 years or so.

There is no doubt grains are beaten down and out of favor, and that represents a buying opportunity.

Once supply and demand sorts itself out, we should see the beginning of a long-term bull market in agriculture, with little to hold it back.

It may take a little longer because of the tightness of the global economy and the near-record crop results this year. But we can be sure it will kick in sometime soon, and when that happens, those that have positioned themselves accordingly will make a fortune through their investments in agriculture.

Agricultural Commodity Supply and Demand

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