Tuesday, October 31, 2006

Speculators buy drought-hit crops

The Guardian recently ran an article on the agricultural commodities, highlighting that sector's performance against the strong multi-year runs enjoyed by the industrial metals, energy, and precious metals groups.

Prices for wheat and corn crops are being affected not only by drought, but biofuel production and increased demand from Asia as well. A new group of speculators is also starting to pour into the commodities market; hedge funds are becoming more active in this arena and retail investors are gaining exposure to commodities through funds, ETFs, and other exchange-traded instruments.

For more information on the new commodity ETFs and instruments such as exchange-traded notes (ETNs), please enter the terms in either the Technorati or Google blog search features for this site.