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How to Profit From Soaring Commodity Prices

I recently penned an article about expensive breakfast foods and the underlying agricultural commodities driving up the cost of your coffee, bacon and oatmeal.

And this week, I appeared on Fox Business Network to discuss this trend of agricultural commodity inflation — and how to play the rising price of foodstuffs in your portfolio.

Broadly speaking, commodities are quite volatile. This applies to agricultural commodity prices as well as to energy commodities like oil or metals like gold and copper. But if you’re comfortable with the risk, there are a bunch of products out there that allow easy access for trading. They include:

  • Coffee: You can hold coffee in your portfolio with the iPath Dow Jones-UBS Coffee Subindex Total Return ETN (JO) and the iPath Pure Beta Coffee ETN (CAFE)
  • Sugar: You can invest in sugar via the iPath Dow Jones-UBS Sugar Subindex Total Return ETN (SGG) and the Teucrium Sugar Fund (CANE)
  • Wheat: The Teucrium Wheat Fund (WEAT) is a direct play on wheat prices.
  • Beef and pork: Investors can play the iPath Dow Jones-UBS Livestock Subindex Total Return ETN (COW), which holds both cattle and hogs.

There also is the broad-based Powershares DB Agriculture Fund (DBA) that holds a bunch of grains including soy and corn, or agribusiness plays like Monsanto (MON) and Syngenta (SYT) that produce drought-resistant seeds and pesticides to increase yields.

Check out the video for more details on how to play this trend.

Jeff Reeves is the editor of InvestorPlace.com and the author of The Frugal Investor’s Guide to Finding Great Stocks. As of this writing, he did not hold a position in any of the aforementioned securities. Write him at editor@investorplace.com or follow him on Twitter via @JeffReevesIP

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