The following is an excerpt from Elizabeth O’Brien | August 9, 2012 | Smartmoney.com |
Quick, name the two best-performing asset classes over the past five years. Gold, you say? That’s right. Most investors are aware of the shiny metal’s ascent. But the other might come as more of a surprise. Here’s a hint: it’s getting to be as high as an elephant’s eye this time of year. Yes: corn and gold are tied for first as the top-performing global asset classes of the past five years, with returns of 144% each, according to a Deutsche Bank report out Thursday. So what’s going on with these strange bedfellows, and is it too late for investors to get in on the action?
The price of corn’s meteoric rise comes down to simple supply and demand. The nation’s farm belt is suffering from a major drought. And while the dry conditions are most acute this year, it’s actually the third year of weather-related crop woes for the United States, an “unprecedented” stretch in modern times, said Sal Gilbertie, president of Teucrium Trading, sponsor of a corn exchange-traded fund (ticker: CORN).
Indeed, “severe or greater drought” is affecting about 75% of corn and soybean production, according to the United States Department of Agriculture. This means corn yields are way…..
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