Back to top

Real Time Insight

This page is temporarily not available.  Please check later as it should be available shortly. If you have any questions, please email customer support at support@zacks.com or call 800-767-3771 ext.  9339.

Thanks to record heat across much of the crucial grain growing regions of the U.S., prices for a number of key staple products are soaring. Front month wheat contracts have added almost 33% in the past few weeks while comparable contracts in corn have gained about 50% in a similar time period.

It also doesn’t help that other nations around the world are seeing similar issues with their crops too. In fact, Russia’s grain crop is also plunging, offering little relief from abroad.

Some are also forecasting that this boost in prices could also add to costs at the pump (due to heavy ethanol use) or boost meat prices since some grains are very popular as feed for everything from chicken, to pork and cattle (read Is it Time to Buy the Livestock ETFs?).

Thanks to these trends, worries are beginning to build that a full blown crisis could be on our hands at some point soon, forcing many investors to readjust their portfolios to match this new reality. However, there are a number of ways to tackle this problem from an investing standpoint including the following options:

  • Buy futures/ETFs that are tracking grains: Products like JJG or (CORN - ETF report) offer investors exposure to grain futures and could be big winners should the drought continue. However, many of these products have already soared in the past few weeks. How much in gains could be left?
  • Invest in the fertilizer/nitrogen sector: Companies like Terra Nitrogen could be big winners if farmers demand more products to boost yields. Also, many may be able to afford more spending in this department, especially if they are seeing high prices for their (limited) harvests. Investors can also take a basket approach to the agribusiness space by looking at (MOO - ETF report) instead.
  • Short commodity end users: Firms that have high exposure to grain or general food prices could be in trouble as their main product costs soar. Companies in this segment could include Kellogg’s (K - Analyst Report), Tyson Foods (TSN - Analyst Report), or in the ETF world, the Food & Beverage ETF (PBJ - ETF report).

What do you think? How do you play this brewing crisis from an investment perspective?

Do you like any of the options above or do you believe there is a better way to approach the problem?

Let us know what you think in the comments below!

(also read Beat the Heat with These Three ETFs)

5 Stocks to Double in 2014

Today, you are invited to receive a free Special Report from Zacks Investment Research. It reveals five companies that could gain +100% and more in the next 12 months.

One is set to ride a little-known All-American energy boom. Another is a chip maker looking for big gains through Google Glass. Another could be the next alternative energy "Tesla."

Close This Panel X

Please login to Zacks.com or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research

Close

Are you a new Zacks Member or a visitor to Zacks.com?

Top Zacks Features

Learn more

Start for as little as $4.50 per trade.

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Zacks.com. Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
BITAUTO HOLD BITA 35.33 +14.82%
ANI PHARMACE ANIP 24.79 +14.66%
E HOUSECHINA EJ 10.99 +9.24%
CANADIAN SOL CSIQ 26.97 +7.15%
INTERNATIONA ICAGY 33.30 +5.38%