Now the grains are literally on fire.
News reports over the weekend of wild fires triggered by historic draught conditions in Russia and the Ukraine, consuming vast swaths of wheat have sent prices flying.
The Food and Agriculture Organization (FAO) now predicts that 10-15 million tonnes of wheat will go missing this year, leading to global supply shortages.
The big problem is that the breadbasket of Europe has long been the low cost provider of grain for the world market, and their absence is going to squeeze major consumer nations, like China and India.
You all know that I have been wildly bullish on the ags since June. Since then, the corn ETF has rocketed 18%.
I have recommended the agriculture ETF (DBA) for the past year, which has long been moribund.
But its 9.2% weighting in wheat took it up a healthy 12% in July. If anyone had any doubt about the existence of global warming, you better take a look at these charts.
Courtesy: Mad Hedge Fund Trader