Tuesday, November 3, 2009

Rice Prices Increasing Dramatically: ETN and Futures

While wheat prices are dropping precipitously (see our report), rice prices have been increasing dramatically lately. U.S. rice futures prices spiked to a 9-1/2 month yesterday. One of the reasons is the weak monsoons in India. Also, dry weather in Brazil and Argentina is being blamed for a weak planting this year (summer season is just starting there).

Rice ETFs/ETNs

These are hard to come by. One that has a small portion in rice is RJA, Rogers Commodity Index. The ETN is up basically flat for the year.

Components, there is a lot of them:

(please click to enlarge)

With so many components, we are not sure what the point is with this ETF, unless it is to profit from a collapse of the USD?

If you trade futures, there are many futures contracts that can be traded at the CBOT. The chart below shows the Janaury contract. You can clearly see how prices have gone up:

(please click to enlarge)

(The buy and sell alerts are weekly, from INO's tool, free trial here)

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