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Strategies & Market Trends : Bosco & Crossy's stock picks,talk area
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To: jayt who wrote (24413)10/24/2006 8:11:41 AM
From: gcrispin  Read Replies (2) of 37387
 
I have sold two-thirds of my wheat and continue to hold one-third. The price is at ten year highs, so the selling has picked up. The reason I continue to hold some wheat is that the circumstances are pretty unusual this year. Australia has never had such a poor harvest, and they are a fierce competitor in the Asian and Middle Eastern markets.

I really don't have any favorites. One cousin who runs a large operation uses nothing but John Deere. The farmer who leases my land uses a variety of machines. Since most farmers have to be quasi-mechanics, it really comes down to what machines you know best and how close is the nearest service dealer. I have casually followed AGCO which has more of an international presence than Deere. The Ukraine has dramatically increased production in the last five to six years. South America also has increased production. But the drought has hurt some of these areas and AGCO recently revised downward their estimates.
Seed is sold through coops, so you know the varietal names, but not necessarily the company that provides them. You can bet that farmers have already planted winter wheat in anticipation of the high prices continuing. E. Washington mostly grows soft white wheat, but the farmers I know are taking a chance with planting hard red so has to capture the higher prices for hard red.

You might look at some of the fertilizer companies. In the past I have owned Agrium as the feedstocks were located in Canada, so, in the past, they had an advantage of buying natural gas with Canadian dollars and selling fertilizer for US dollars. They also have a presence in SA. Of course, the strengthening of the Canadian dollar has taken away most of this.

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