Sofft Commodities Where Are They?

[Faithman]

Hi,

Could anyone enlighten me as to which shares provide exposure to soft commodities such as Sugar, Coffe and Orange juice, please?

Thanks.

[foxytrader]

Hi,

Could anyone enlighten me as to which shares provide exposure to soft commodities such as Sugar, Coffe and Orange juice, please?

Thanks.

Faithman

UK quite limited but Tate and Lyle are quoted as are Nestle (although share price is 175 swiss francs or about £60 per share!!) ABF and Cadbury Schweppes.

Alternatively if you want direct exposure consider trading the commodity itself in London or Chicago through spreadbetting or options. IG index or Cantorindex are good firms.

Also possible to buy soft commodity-based collective funds now.

Hope that helps.

[Faithman]

Thank you Foxytrader

[urban_hymn]

Also possible to buy soft commodity-based collective funds now.

Hope that helps.

Foxy, anyone, have you got more info on these funds. I'm not keen on individual stocks, having had little success with stockpicking in the past.

hymn

[foxytrader]

Foxy, anyone, have you got more info on these funds. I'm not keen on individual stocks, having had little success with stockpicking in the past.

hymn

Man Group are the major player in this area in the UK. Please be very careful though as these are managed futures contracts which means they are geared and work on margin. They are not (as they used to say) for widows and orphans.

Fox

[urban_hymn]

Man Group are the major player in this area in the UK. Please be very careful though as these are managed futures contracts which means they are geared and work on margin. They are not (as they used to say) for widows and orphans.

Fox

Thanks - I really was looking for a sort of Soft Commodities version of Merrill Lynch Gold and General. There's just no way to play food, fertilisers, agriculture etc without buying loads of individual stocks or various risky 'instruments' it seems.

There's a fund called M&G Global Basics.

I suspect that their smaller holdings might include soft commodities. Unfortunately they only publish their top 10 holdings which are oil, mining, energy stocks.

[foxytrader]

Thanks - I really was looking for a sort of Soft Commodities version of Merrill Lynch Gold and General. There's just no way to play food, fertilisers, agriculture etc without buying loads of individual stocks or various risky 'instruments' it seems.

There's a fund called M&G Global Basics.

I suspect that their smaller holdings might include soft commodities. Unfortunately they only publish their top 10 holdings which are oil, mining, energy stocks.

Agree with you absolutely UH. It is an asset class I would love to get involved with. My interest was stimulated for several reasons not least because I was briefly in a previous life a (fairly average) screen trader of coffee on London FOX - happy days.

Think the difficulty is that apart from the very big US agribusiness people (Cargills springs to mind) it is quite difficult for a fund manager to get a holding in a quoted producer of the actual commodity. They are jv's with farmers and state trade bodies or generally not in purely private ownership. Plenty of trading firms but realistically they expect to make money irrespective of what the underlying commodity price has done so a tangential play at best (oilexp relative to actual oil price would be analagous I suppose).

Another huge difficulty is that this isn't an unfettered market. We have quotas and cartels WTO stuff and vast amounts of governmental vested interest and interference. No-one likes that when investing.

Got the ML fund myself in my SIPP. Its my only concession to goldbuggery but it makes me feel a little more diversified. Also got some Gartmore China Opps..... Ah well long time to retirement!

Will keep in touch UH. Don't know what you do for a crust but this (collective investments) is my line anyway (for my sins) so if anything does come up will let you know.

The Fox

[urban_hymn]

A few months ago, Moneyweek magazine published an article about investing in soft commodities.

While they did not list any funds, they did list various stocks as a way of playing soft commodities. However, I notice that the accepted wisdom seems to be that investing in the commodities themselves historically gives the best returns.

I will dig out the article (not a quick job as they don't provide any sort of index) All the stocks were US listed as I remember and I will list them on here.

[urban_hymn]

From Moneyweek magazine 25/2/2005 the following "tips" to play soft commodities:

Bunge (BG) New York listed agribusiness

Sipef (SIFB) Brussels listed plantation management in tropical and sub-tropical areas/agro-conglomerate

Cresud (CRESY) Nasdaq - largest rural landowner in Argentina

Agrium (AGU) NYSE - Global fertiliser producer

Deere and Company/Caterpillar (DE) (CAT) NYSE listed - Heavy agricultural machinery.

I will check how these have done since MW tipped them.

Looking at past issues of Moneyweek magazine from the last 18 months I notice that the vast bulk of their recommendations have been spot on. 18 months ago they were banging on about buying gold, oil, commodities which as we now know have all presented great opportunities to make money.

The only significant blot on their record seems to be calling the top/crash in house prices too early.