This Day On The Street
Continue to site
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

MOO: Feeding the World Is Big Business

The following commentary comes from an independent investor or market observer as part of TheStreet's guest contributor program, which is separate from the company's news coverage.

By David Gillie for ETF Digest

NEW YORK ( ETF Digest) -- No matter what, people have to eat -- 7 billion of them now globally.

You can't eat your iPhone. You can't eat your gold coins. And you can't eat oil.

Feeding the world is big business and agriculture is a high tech industry. Farmers have to maximize crop yields with exact fertilizer blends for individual crops and conditions. Grains, fruits and vegetables have to be hybridized and engineered to grow outside of ideal soil conditions and climates. A John Deere harvesting combine is a complex piece of technological equipment costing as much as a Lamborghini ($250,000). Supplying the needs of farmers to feed the globe is one of the world's fastest growing industries.

Market Vectors Agribusiness (MOO) ETF is the best way to hold a basket of agricultural supply companies.

QE2 dollar devaluation brought a monster rally to grains in 2010. Hype and rumor lead to a hoarding of grains and resulted in a glut. Uncertain economic outlook drove to reduction of stockpiles. Fickle as commodity traders are, they then looked to see what the next "hot commodity" was and the Ag sector faded through much of 2011. The need for food hasn't faded and recent El Nina weather patterns have brought droughts expected to continue through spring 2012. Short supplies equal higher prices.

As with other commodities, Ag is highly responsive to movements in the Dollar (.DXY). With the Dollar currently at its 52-week high nearing 82, traders are already moving into Ag (JJA) anticipating a Dollar decline and cyclical expectations of the sector. Fertilizers had been hard hit with the Ag sell-off and rising Dollar. Negative sentiment has been strong. However, grain prices tend to front run fertilizer prices (or actually, fertilizer lags grains as farmers prepare for new crops) and the renewed interest in Ag is encouraging.

As further confirmation, MOO's largest holding, Monsanto (MON - Get Report) crushed analyst's expectations in its recent quarterly report and projection for 2012. Deere (DE - Get Report) has been especially strong and could have a "Golden Cross" of the 50-day moving average crossing above the 200-day moving average soon. Potash (POT - Get Report) is showing a good bottoming process.

MOO has some very interesting chart patterns.
1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

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
Stocks Under $10

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

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

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
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
DE $79.09 0.00%
MOO $48.68 0.00%
MON $95.43 0.00%
POT $19.72 0.00%
AAPL $117.81 0.00%


Chart of I:DJI
DOW 17,798.49 -14.90 -0.08%
S&P 500 2,090.11 +1.24 0.06%
NASDAQ 5,127.5250 +11.3820 0.22%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs