In terms of soft commodities, Latin America is the power house of agribusiness. Several commodities such as soya are experiencing high prices for an extended period. Sugar is at a record level with massive demand brought on by the possibility of a new market in ethanol. The impact this will have on the commodities industry is not yet known. What is known is that Latin producers are making hay while the sun shines. As markets continue to develop, the financial community must keep up.
Soft commodities are often considered the most speculative commodities and it doesn’t take much for institutional investors to get the ball rolling in these markets. Trends can accelerate quicker than you might expect and trends can change quickly. You often have to be nimble to trade these markets, but buying them on value is usually a good proposition.