re: yellow cake, what do uthink of cotton's future
Cotton's future is bright and I say that in respect to its price prospects. It is an energy guzzling crop requiring a lot of fertilizer and of course a secure supply of water. Two resources we know are becoming limiting relative to demand.
At a macro level as energy prices rise there are a number of things happening in the world that would put pressure on cotton inventories.
One, cotton is a substitute for synthetic fibres made from oil, hence both fluctuate directly proportionally (or in this climate rise and rise).
Two heating bills are going through the roof around the world (particularly the world's most affluent which live in the coldest parts of the world) and that simply means that people will have a tendency to turn down the heat and wear more clothes. Wool could benefit too but it is a very inefficient and expensive fibre to produce. Growers struggle to make a dime when it is $7-8/kg (ie $7000-8000/tonne).
Not to mention the competition that will occur for land amongst all the respective crops out there. So if corn prices are going through the roof then you may well get less cotton grown unless ... cotton prices rise! I believe the future for agricultural commodities to be strong.
Corn, rice, wheat, cotton and in a year or so after the grain bull crucifies the meat and dairy sector, maybe animal proteins. But the animal protein sector will have to increasingly compete with cheaper sources of vegetable protein as its supply burgeons with ever increasing soybean crops (the protein meal is left after the bean is crushed and the oil hexane extracted). But because their cost base is directly correlated to feed grain prices, animal proteins will have to increase in price in the longer term if animal protein farmers are to make money and if the affluent sector still wants their meat. I have seen and tasted some of the meat substitutes coming out of the American food manufacturing sector and these guys (ADM etc) are getting good at 'making' meat for a fraction of the cost of growing the stuff in the form of an animal. Check out the ingredients in your next meat pie, sausage rolls, pressed turkey etc etc. You're all already eating meat substitutes in increasing amounts. This trend will increase as the oil bug bites!
Hope that helps. You need to understand how all the sectors are intertwined to truly appreciate the investment opportunities. Good luck!
