How You Can Profit from the “Year with No Winter”

If you live in the northern parts of the country, it’s probably not news that this has been the “year with no winter.” Indeed, I recently read that this winter has been the fourth warmest on record in the northeastern U.S.

Contrarian and savvy investors are constantly on the lookout for unusual occurrences in the economy, the market and nature, and in turn the unique investment opportunities they present.

So I’ve been searching the landscape for opportunities related to this highly unusual weather, and I came across an interesting possibility …

I have traded the grain and agriculture markets for many years, getting my first exposure to them when I was a trader at a hedge fund in 2005. I was reading some research over the weekend that farmers in the heartland are reporting their fields are looking like it is already early May, instead of the end of March.

As a result, the gradual return to life that comes with spring has arrived: Animals emerging from their dens, flowers blooming, and insects buzzing around.

And it’s the buzzing insects and flowers growing 6-8 weeks early that have farmers concerned about the increasing level of risk of weeds and the potential damage to their crops.

Consequently one of the offshoots of the “year with no winter” will most likely be increased demand for fertilizer, pesticides, and weed control chemicals.

Additionally, in the February World Agricultural Supply/Demand Estimates release, we learned that the USDA expects farmers, because of high crop prices, to plant the largest number of acres in the country since the 1940’s.

U.S. farmers will plant the biggest crops in a generation to take advantage of an early spring and higher prices.

I think fertilizer and pesticide chemical companies could be one of the beneficiaries of this unusually warm winter, as more crops planted and a longer spring will make demand for their products rise.

But if you aren’t comfortable owing individual stocks, the Market Vectors Agribusiness ETF (MOO) gives you a diversified way to consider playing this trend …

While MOO isn’t a pure play on the fertilizer and chemicals sectors (it has a nice mix of agricultural-related industries), it offers wide exposure to increased demand for agricultural-related products.

Contrarian investors know that unique events create unique investment opportunities — which means to be a successful investor you must always be on the hunt for “one off” events and the potentially profitable opportunities they present.

And the demand that could be in store for products enhancing crop production could be just the event you’ve been looking for!

Best wishes,

Tom

P.S. ETFs are hot. In fact, the number of ETFs available to U.S. investors has exploded in the last five years. So finding the right one can be like trying to find a needle in a haystack. And that’s why my colleague, ETF expert Ron Rowland, just put a brand-new FREE video online for you. Turn up your speakers and click here to watch it now.