This article originally appeared on RealMoney.com on Sept. 4, 2014 at 4:00 p.m. To read more content like this AND see inside Jim Cramer's multi-million dollar portfolio for FREE... Click Here NOW.
In a sort of sneaky fashion, agricultural futures have plummeted to levels not seen in some time. Corn is about $3.50 a bushel. Soybeans are down to $10 per bushel. This is a far cry from a few years ago when we had $6 corn and "beans in the teens."
It is even a farther cry since the middle of the last decade when pension funds were buying commodity index swaps and you had guys such as Mike Masters testifying in front of Congress about speculation and hoarding. The index swaps eventually went out of style, but prices stayed high for a long time.
High grains prices generally means rich farmers. As I talk to people around the country, it is generally recognized that farmers are often the richest people in town. This was not always the case. Back in the 1980s, when I was growing up, farmers had a rough go of it. In fact, in the medium-term history of agriculture prices, things have only been interesting since 2004. If you go back before that, you are looking at long periods of $2 corn.
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So, what if we get back to those levels? Some very smart agricultural analysts I know think it will happen, and they have been telling me that for years. They are probably going to turn out to be right, albeit, belatedly. But if you think about it, if you are bearish on oil because of shale production, you can't be bullish on agricultural stocks unless you think there is going to be a prolonged period of drought. There hasn't been. Some of the agricultural guys I follow on Twitter were tweeting pictures of how high the plants were early in the season.