Why Investors Are Planting Their Assets in Agriculture in Latin America

by Dave

The long-term fundamentals looks rather promising for agribusiness, along with related agriculture ETFs that tracks the sector. The human population is still expanding and demand for high-protein sustenance is increasing from a growing middle class in the emerging markets.

Food security remains a major issue, writes Richard Barely for The Wall Street Journal. Prices for basic crops spiked before the financial crisis, which triggered riots in some countries, and millions around the world are still undernourished.

If countries like China and other developing countries switch to more meat consumption, grain production would have to keep up to feed livestock and better technology would have to be implemented to boost crop yield. Additionally, biofuel production will reduce the land available for food crops.

Corn futures rallied as hot weather persisted in the corn belt, pushing past $4 a bushel for December deliveries, reports Ian Berry for The Wall Street Journal. Wheat futures prices jumped more than 6% on concerns about the how the weather may affect crops in Europe and Russia.

via Seeking Alpha