We blogged about our interest in the out of favor agricultural play. We added more October 28 call options on the DBA today. We now have both October and January 25 2014 call options It’s a cheap play on a drought this year. It could double or even quadruple if we have a drought again. Right now the Agricultural Department is forecasting bumper crops and the price of grains is near a 52 week low.
Investing in climate change used to mean financing the fight against global warming. Morgan Stanley, Goldman Sachs Group Inc., and other firms took stakes in wind farms and tidal-energy projects, and set up carbon-trading desks.Then, as efforts to curb greenhouse-gas emissions faltered, the appeal of clean tech dimmed: Venture capital and private- equity investments fell 34 percent last year, to $5.8 billion, according to Bloomberg New Energy Finance.Now the smart money is taking another approach: Working under the assumption that climate change is inevitable, Wall Street firms are investing in businesses that will profit as the planet gets hotter.
via Investors Embrace Climate Change, Chase Hotter Profits – Bloomberg.
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Farm Bets
A measure of speculative positions across 11 agricultural products from wheat to coffee to cattle fell 3.4 percent to 140,580, the lowest in almost four years.
Wagers on a decline for coffee increased to 24,671 contracts, and were at a record bearish outlook of 28,454 in the week ended Feb. 19, the CFTC data show. Supply will outpace demand by 6.73 million bags this season, each weighing 60 kilograms, from a 1.08 million-bag shortfall in the previous season, Rabobank forecasts.
“In the past couple of years everyone had been enthusiastic about commodities being the diversifying risk trade, and that seems to have changed,” said Frances Hudson, who helps manage about $263.9 billion of assets as a strategist at Standard Life Investments in London. “Also, the dollar has been playing a huge role as it has jumped against other currencies. Investors have been disappointed by the broad commodity performance and have continued to withdraw.”
To contact the reporter on this story: Debarati Roy in New York at droy5@bloomberg.net
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