Agriculture ETFs are hopping Tuesday on renewed optimism that prices are going higher ahead of a pair of government reports that could pump markets up even more.
The broad PowerShares DB Agriculture Fund (DBA) is up 1.4%. Also, the stock-minded Market Vectors Agribusiness ETF (MOO) has gained 1.8% so far.
Grain futures are rallying ahead of two reports by the USDA expected to be made public on Wednesday morning. Analysts are expecting that the department’s estimates on both U.S. crop production and world agricultural supply as well as demand should show a strongly bullish picture across most major markets.
In particular, demand for corn, soybeans, wheat and even gasoline is expected to tighten, prompting greater buying activities from both investment and commercial traders, according to a report by Dow Jones Newswires. The recent sell-off has made prices more attractive and traders said that many investors weren’t waiting for tomorrow’s numbers to put into black and white what’s widely being assumed.
Shares of fertilizer companies CF Industries Holdings (CF) and Mosaic (MOS) are up more than 4% on the day. Also, ag machinery maker Deere & Co. (DE) is ahead by 3%-plus.
Also prompting a more confident mood is a report by Credit Suisse. The firm’s ag analysts raised their fertilizer price outlook based on expectations of robust grain prices and strong demand from emerging markets.
Shares of Potash (POT), the world’s largest fertilizer producer, are up close to 3%.
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