Thursday, March 24, 2011

Food Prices to Rise Sharply Soon, General Mills and ETFs

It is not news to anyone who shops for groceries that food prices are rising sharply due to the surge in prices of commodities, the low U.S. dollar, the rise in oil, and increased Chinese demand, etc..

General Mills Inc, GIS, said today that it expects commodities inflation to accelerate. Therefore, it has warned that it will keep raising prices.

So stock up on Cheerios cereal, Progresso soups, and Nature Valley bars.

General Mills actually reported a higher quarterly profit due to a surge in international sales. However, it reported a drop in U.S. cereal buying as its margins are being reduced  by higher costs for ingredients, including grains, meat and dairy.

General Mills expects further and even sharper increases on these items in the fiscal year starting in late May and said that it has little choice but to "pass those costs on to stores that sell its products"

Please note also that  a new agriculture ETF was launched yesterday: CROP, in addition to COW and MOO, DBA.

These are the buy and sell alerts on GIS, currently with a negative score of -55 (access tool trial)

In contrast, COW has a positive score of +55.

( INO's tool trial, 2 months free access).

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