The questions arise where the investors in US would invest when the time the stocks are going to be overvalued when the Fed starts to taper quantitative easing. The year 2013 has been so far the year of buying stock and all the investors are looking into the sectors where they could get an attractive approach. The approach was nothing but all of the investor’s considerations worth be in agricultural commodities. Though this year the index was down about 15% but the fundamentalist are in favor in the medium to long term because the trend can be well up.

So what could be the reason so that investors are attracted to invest in agricultural commodities. The one obvious reason is the climate change where scientist believed that global warming would be harsher i.e. floods, natural disasters, drought and hurricanes. Though it’s a shame to get the profits from other people misery but the drought of US in 2012 shows 40% increase in agricultural commodities and it seems this is an excellent opportunity for the investors of buying agricultural commodities.

Now let’s talk about the second obvious reasons that investors are lured to the agricultural commodities are the change in global political and economic landscape.  So what makes the price of agricultural commodity go up in domestic as well as overseas. Every emerging economies have a strong agricultural base like Brazil have a large beef industry and China have more diversified foodstuffs such as corn, wheat and soybeans which have higher demand qualities from western countries. Saying that, there would be competition for agricultural commodities and price would go up eventually and for the farmers in developed nations as well as in domestic purpose. In the near future, the US and Latin America are likely to produce excess amount of ethanol in demand for future. Again this can start to open export market to corn where price of corn would go up. This is the recent data of S&P global agricultural business Index has risen nearly 170% in the last five years.

However, it can be seen that for the strong rates of return and for taking advantage in shorter term movements in agricultural commodities, markets have the most common approach in trading in commodity future market.