Check out this “megatrend”: 97% of global population growth over the next 40 years will occur in Asia, Africa, Latin America and the Caribbean, says the shiny new 2009 World Population Data Sheet. The headline data point was the total growth projection for the world population: 7 billion by 2011. That’s a 200 million extra people on this Earth in just two years.
Brazilians used to joke that their country was the country of the future – and always would be because a new crisis seemed to crop up every time the economy came close to fulfilling its potential.
In the last few columns, we’ve focused on sectors that typically see lots of action during the summertime. Most notably, this includes the “grains” (corn, wheat, soybeans), the “softs” (orange juice), and even natural gas. When you have commodities that are so susceptible to weather, you often see dramatic moves in one day, only for it to unwind the next day.
Resource exploration stocks are notoriously volatile. Fear and greed play out in this sector like few others. Stocks tend to go irrationally high and stupidly low. And therein lies the opportunity.
The oil price is stubborn, like a two-year-old who refuses to eat his mashed peas. Despite all evidence that the market is well supplied, oil is over $70 a barrel again as I write. Taking the view out to the horizon, though, I think it will go higher and will drag the price of most commodities higher in its wake.
All the factors that set the fertilizer bull market in motion in the first place are still here. Populations are still growing. Diets are shifting toward more fruits, vegetables and meats — all fertilizer intensive. As Potash CEO Bill Doyle says, “This will continue to put pressure on global grain supplies, as farmers are being challenged to produce more with land and water resources that are shrinking on a per capita basis.”
After posting nice returns earlier in the week, the Canadian markets took a well deserved rest during Friday trading. For the tale of the tape: the TSX Exchange tacked on 0.11%, while the TSX Gold Index fell 0.60%, and the TSX Venture Exchange, Canada’s largest junior exploration bourse, added 0.50% with the advancers beating out the decliners by a 415 to 373 margin on a modest 137 million shares traded.
Base metals were higher on Friday. Copper rose 0.26 cents to close at $2.4919/lb. Nickel gained nearly 23 cents to finish at $7.5266/lb. Zinc climbed almost one penny, ending at $0.7530/lb. Aluminum added a cent and a half, closing at $0.7957/lb., while lead moved to $0.7880/lb., up a penny and a half from the previous session.
Gold traded sideways through Hong Kong then shot north at the London open and remained range-bound between $951 and $953 for the rest of the day, finishing at $951.60/oz., up $3.60. For the week, gold is up 1.5%.
The resource-rich Canadian markets continued to gain momentum to the upside during Thursday trading with only the gold sector showing signs of weakness. For the tale of the tape; the TSX Exchange surged 2.33%, while the TSX Gold Index fell 0.79% and the TSX Venture Exchange, Canada’s largest junior exploration bourse, added 1.28% with the advancers beating out the decliners by a 432 to 371 margin on 184 million shares traded.