Global Markets

An explosive rally started off Friday morning’s trading day, fueled by rumors that China might be easing on its “zero Covid” policy. But it was short-lived: by midday indexes were either down or flatlining. This kind of intraday volatility is going to be with us for a while going forward, and I want you to […]

Been to the grocery store lately? Then you know that food prices are surging.

The U.S. Federal Reserve refers to that as “inflation” – a clinical bit of jargon that fails to capture the sticker-shock pain your family feels every time you wheel a shopping cart into the checkout line.

Central bankers also tell us this inflation is “transitory.”

But I’m here to tell you that it’s not.

Food prices have been rising for almost two years; they really accelerated during the pandemic and have never looked back.

And it’s only going to get worse.

Thanks to surging demand both here and overseas, the multi-year “Megadrought” in the southwestern United States, an ongoing “overhang” from the COVID-19 pandemic, and foreign-trade gamesmanship from Beijing, agricultural commodities are soaring in price.

Just look at the “Big Three” of ag commodities – wheat, corn, and soybeans.

Wheat, the key ingredient in flour, bread, cookies, pastries, and pasta was already at a seven-year high – and just logged its biggest weekly climb in almost two years on expectations of strong global demand and lower production from Russia, the world’s No. 1 exporter. Cold temperatures have hit winter wheat crops in the Southern Plains and Central states of America. And, according to FranceAgriMer’s cereal crop report, France’s wheat and barley crops have deteriorated, too.

Corn, which goes into cereals, snack foods, soft drinks, and other sweet foods, is already at its highest level since 2013 – thanks to lousy weather that’s delayed planting in such crucial growing regions like the United States and Brazil. The U.S. Department of Agriculture said that cold weather could slow the germination of newly seeded corn. U.S. corn crop was 8% planted as of Apr 18. The crops from the 2020 harvest have also been deteriorating.

Finally, we have soybeans, used in soymilk, tofu, and as protein for cattle – meaning they influence meat prices. Soybeans are brushing up against eight-year highs. Tightening global grain and vegetable oil supplies just ignited the biggest weekly rise in soybean futures since May 2019. Meanwhile, the Chinese are trying to import more soybeans to meet strong demand from that country’s livestock sector. And shipments from Brazil – the world’s top exporter – dropped to their lowest level since January 2017. The Farm Bureau says cool, dry weather in the Midwest could hurt soybean crops, although U.S. farmers plan to plant 87.6 million acres of soybeans this year – the most since 2018 – to capitalize on that demand and the higher prices the supply squeeze will create.

So, yes that basket of groceries you’re bringing home to your family will continue to take bigger and bigger bites out of your household budget.

Here’s why I’m sharing this all with you today.

I’m decoding the ag-commodity surge, explaining the inflationary spike still to come, and identifying some of the companies that stand to be the biggest beneficiaries. You can buy these shares, ride along as they profit – and make enough to transform food-price inflation into a non-factor in your household.

And I mean starting today. Starting right now…