Kansas City Musings
By Brad Zigler | September 08, 2008 | 2:00 PM | 0 Comments
The good news and the bad news about produce, according to Greg Johnson, editor of The Packer newsletter, is its short shelf. The bad part has to do with the perishable nature of fresh fruit and vegetables, of course. So, what's good about it? Well, there's less chance for prices to stray much from economic reality, as we've seen with the futures market for other agricultural commodities.
Johnson was speaking to journalists gathered in Kansas City for a two-day workshop on agricultural economics. The conference, painstakingly put together by the University of Missouri's School of Journalism over the past six months, was conceived when agricultural commodity prices were, you should forgive the expression, in full flower. When the workshop was conceived, ag prices, at least measured by broad-based exchange-traded notes like the DB Agriculture Long ETN (NYSE Arca: AGF) and the DB Agriculture Double Long ETN (NYSE Arca: DAG), were buoyant, rising as much as 7.7% and 12.9%, respectively, between April and July. (For a look at these, and other exchange-traded vehicles, see "A Bumper Crop Of Agricultural Products").
So much for shelf life.
If you look at the roster of ag funds and notes now, only the inverse products are trading above their 200-day and 50-day moving averages. The bloom, please forgive again, is off. The mirror-image notes, DB Agriculture Short ETN (NYSE Arca: ADZ) and the DB Agriculture Double Short ETN (NYSE Arca: AGA) are favored now, trading 7.4% and 14.7% above their respective 50-day averages.
It's too late to rejigger conference themes to reflect current market conditions, of course. Besides, nobody believes you can sell newspapers bannered by headlines reading "Wheat, corn prices moderate."
More on this later ...
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