Wednesday, April 30, 2008

Commodities Fundamentals

Two articles in the FT came to my attention, both of which deal with hedge funds getting into the farming business. "Hedge funds farming?" you say. Yes, given the strong supply and demand fundamentals for some commodities in the short to medium term, and the dislocations caused by pension funds and other purely financial players in the futures markets, there appears to be a great arbitrage opportunity that requires a player with both financial and operational savvy to exploit.

Hedge funds muck in down on the farm

Agricultural land

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