Yum! International agri-commodities futures looking pretty appetizing (really)
| May 16th, 2010 | Filed under: Academic Research, Institutional Investing, Today's Post | By: Alpha Male |
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Who knew food could be so exciting? With more – and perhaps more importantly richer - mouths to feed in the world each year, hedge funds have taken an interest in agriculture over the past few years. While in Brazil, we met with the alternative investment firm behind one of the country’s many agri-business success stories – a company that turns scrub land into arable land for growing soybeans and coffee for your grande soya-milk double-mochafrappacino.
Of course, most hedge funds don’t actually buy actual farmland and sell physical soybeans. Instead, they satisfy their hunger by chowing down on agriculture futures contracts. With the interconnectedness of the global financial system, it’s easy to think that these futures contracts are the same everywhere – that a September corn contract trades the same in Paris as it does in London, Chicago or Toronto.
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