News, confirming higher commidity prices, hence we should expect...

News, confirming higher commidity prices, hence we should expect higher fertiliser prices.

"Food and water investments to weather drought Scarcity could drive commodity prices higher for years to come"
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"Drought in one region simply means higher prices and increased planting incentive for growers elsewhere"


CHICAGO (MarketWatch) — Weekend Investor July 20, 2012
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Record heat, dry skies, and acres of drought-stricken corn are stressing farmers and cereal makers, but commodities and natural resource investors are cool and composed.

Weather has caused a “supply shock” that observers say only reinforces a longer-term investing theme in the scarcity of food and water.

A hungry and thirsty world is growing, and “you can’t triple a population in a lifetime without consequences,” said Jeremy Grantham, a closely followed value investor and co-founder of asset management firm GMO LLC., in a speech at the Morningstar Investor Conference in June...

For now, the focus is on supply. June was the fourth-hottest month in the U.S. since 1880, according to the National Oceanic and Atmospheric Association (NOAA) and July has been toasty too. The heat and drought prompted officials to cut harvest expectations. USDA’s July 11 report featured a 12% drop in the outlook for domestic corn output, crossing out predictions for a record harvest. The U.S. soybean crop, which pollinates later than corn, is on track to be the smallest in four years. Global wheat production estimates are down 1% from a June prediction.

Weather fluctuates and markets jump. Certainly, the global reach of crop production can’t be dismissed. Drought in one region simply means higher prices and increased planting incentive for growers elsewhere.

But the U.S. is the biggest producer of corn and soybeans and the largest shipper of grain. About 60% of the contiguous United States was officially in drought, or roughly 3.1 million square miles, according to NOAA’s July 10 release. The heat wave was breaking slightly for much of the country and spotty thunderstorms did move in across parts of the Midwest late this week.