This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

A Rising Tide for Agricultural Commodities

Wheat

Wheat has been the best-performing component on the Deutsche Bank Liquid Commodity Index (DBLCI) in 2011, rising 14.9%, Lewis of Deutsche Bank wrote in a weekly commodities report.

The analyst believes wheat returns have been driven higher on worries that freezing weather in the U.S. and droughts in northern China could damage crop yields. "We believe price spikes in this complex are a growing threat particularly in an environment where governments employ export bans to ensure food security," he said.

In a previous report, Lewis had also noted that droughts that devastated crop production in the former Soviet Union and the subsequent decision by Russia to stop grain exports last summer had lent support to wheat prices.

Too much rain in the European Union, Canada and Australia had also contributed to production problems, Lewis had noted.

Still, wheat inventories remain at high levels, and the floods that hit Queensland, Australia will have limited impact on overall wheat production because Queensland represents only 7% of the country's production -- with most of it having already been harvested, according to the analyst.

"In the absence of any further supply disruptions we would expect wheat to under-perform relative to corn and soybeans given the more generous level of inventories," he said. "We expect the weather induced rally in wheat prices to fade during the coming year."

Waverly Advisors strategist Andrew Barber said Waverly has had a long wheat position since Jan. 5. "It's our expectation that, in addition to fundamental and macro drivers, the grain markets have the potential for narrative event driven bubbles similar to last year's," he explained.

2 of 7

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 17,279.74 +13.75 0.08%
S&P 500 2,010.40 -0.96 -0.05%
NASDAQ 4,579.7890 -13.6380 -0.30%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs