Bolling: Ride These Four Ag Winners

Editor's Note: Eric Bolling is new to TheStreet.com. A top Wall Street trader and an on-air television personality for the Fox Business Network, Bolling specializes in commodities, technology, resource trades and ETFs. He will provide regular picks in a column for TheStreet.com.
Have you been to a baseball game lately? If not, you may get a case of sticker shock. Be prepared. At $65 to $80, those box seats are the most expensive they have ever been. Even a seat all the way out in the bleachers goes for $14!

I cannot imagine how much they are going to be next year when the new Yankee Stadium opens. After all, MLB is expected to out-revenue the NFL this year. But the demand for a day at the old ballpark with my son Eric Chase is most definitely worth the extra bucks.

Now, guess what would happen if the Yankees discounted all the seats for the heart of the summer season? I'm guessing they might sell every seat of every game. There is already demand for the coveted Yankee seats. So, drop the price and see what happens. They would basically fuel the demand (pun intended) for the seats...any and all seats.

Our candidates for President have little, if any, understanding of the simple relationship between supply, demand and price. I love to talk about this on Fox Business because it amazes me that we have three (that's right three) candidates who just don't get the basics of Freshman Econ 101.

If I am reluctantly getting used to a $3.50 pump price and all of a sudden I see the price drop 18.4 cents I think I will fill up. I also realize that this tax waiver is only going to be around for the summer, so I will cut back after the summer. Or maybe October... yeah like after Halloween...or maybe right after Thanksgiving...definitely by Christmas...you know its cold then.

Sen. John Mc Cain (R., Ariz. ) authors the gas tax holiday and Sen. Hillary Clinton (D., N.Y.) jumps on the back of that horse right away. Barack Obama (D., Ill.), to his credit, has passed the first semester because he sees a savings of just $28 to $30 per household. However, he must have been in Rev. Wright's church during the second semester when he was supposed to learn how taxing corporate profits destroys capital spending.

Oil companies reinvest capital into exploration and production at an astounding rate in order to keep the oil flowing to our refineries. Taxing them on a windfall basis draws funds needed for exploration away from the oil fields and into Washington's hands.

Neither Clinton, Obama or McCain have a handle on how to deal with our love affair with gasoline and our subsequent dependence on foreign suppliers of crude oil. I'll get off my soapbox now, let's talk trades.

Given the current political environment, ethanol will remain a favorite "solution" to our gasoline dilemma. In this election year, no one seems interested in suggesting that ethanol be scrapped for the joke it is and that it stop engorging itself on our food supply. Grain demand for food and ethanol has an incredible footprint in the agri-business arena.

More than a year and a half ago, I was suggesting that the demand for corn-based ethanol would provide great trading opportunities going forward. (Check out this article from last year on the play.)

I remain an agri-business bull as the landscape has not changed. Corn will continue to be strong. Wheat will compete with corn for planting acres and farmers will continue to make big bucks no matter what they seed their land with. That means more money in the farmer's pockets to spend!

The trade, which is based on the farmer's profitability and subsequent spending habits, goes as follows.


Monsanto MON -- a high tech seed producer.
Agrium AGU -- a fertilizer company.
Deere DE -- a farm equipment maker
Bunge BG -- a grain processor
As long as government ethanol mandates suggest we move to 20 billion gallons (from the 6 billion or 7 billion we produce now) per year, I like this play.

These trades made as a group have been wildly profitable since I first suggested it in May 2006. I'm not currently in it, but I have been in the past six months and I think that the trade is still a good one even though it has shown big returns year-to-date and in the last 12 months. The same reasons it was good then -- ethanol, greenies, corn, farmers' bulging wallets and politics -- continue to make sense going forward. I love this trade and will stay with it until the commodity bull finishes her run.