VanEck - A Global Investment Money Manager Based in New York City-VanEck

Video Viewpoint

Seasoned investment professionals, sector-dedicated analysts, and creative thinkers are at the heart of our business. Get their perspective on today's market climate.

All Videos

Video Transcript

<p><strong>Global Supply Disruptions: Coffee, Grains, and Protein</strong></p><br/>


<p>ROLAND MORRIS: I think one of the surprising things in the commodity markets this year has been that commodity indexes in general have outperformed other asset classes year to date, and it's because of some of the unique supply disruptions we’ve had.  A very severe late season drought in Brazil created a significant rally in coffee, soybeans, and corn. Coffee was probably the most affected commodity.  It rallied about 40% to 50% during the drought.  It was because of two reasons.  Obviously, current supplies affected prices. Additionally there was some fear that the drought was going to impact next year's crop by damaging the trees.  Since then we've actually had some moderation in the prices across both grains because of expectations of a large U.S. crop, and coffee prices have moderated slightly because it looks like the damage isn't severe enough to impact next year's coffee crop. Brazil is the most important coffee producer in the world, and it certainly had a severe impact on prices this winter, but has moderated slightly since.</p><br/>


<p>MORRIS: Another interesting supply disruption this year was caused by a virus in the U.S. hog population called PED virus. It impacted piglets; it is estimated that we lost over 8 million piglets over the winter and spring of this year.  There is hope that the virus has been contained. The virus created quite a sharp rally in hog prices. They were up over 40% during the peak of the virus and created some demand for other meats on a substitution basis.</p><br/>

<p>At the same time we were trying to rebuild the cattle herd, which meant holding animals back from the cattle population for breeding purposes.  Those two things combined to create quite a rally in all protein markets because people move towards poultry when hog prices and cattle prices rose as much as they did.  Consumers are finding higher prices this summer for all protein products in U.S.  and the markets are responding to the high prices. We're looking like we'll likely get more normal herds by the start of next year. Indeed the forward price points in most of the protein markets have come back down and have moderated somewhat.</p><br/>

- - - - - - - - - - <br/>

<p><strong>IMPORTANT DISCLOSURE</strong></p><br/>

<p>The views and opinions expressed are those of the speaker and are current as of the video’s posting date. Video commentaries are general in nature and should not be construed as investment advice. Opinions are subject to change with market conditions. All performance information is historical and is not a guarantee of future results. For more information about Van Eck Funds, Market Vectors ETFs or fund performance, visit <a title="" href=""></a>. Any discussion of specific securities mentioned in the video commentaries is neither an offer to sell nor a solicitation to buy these securities. Fund holdings will vary. All indices mentioned are measures of common market sectors and performance. It is not possible to invest directly in an index. Information on holdings, performance and indices can be found at <a title="" href=""></a></p><br/>

<p>Please note that Van Eck Securities Corporation offers investment products that invest in the asset class(es) included in this video. Hard Assets investments are subject to risks associated with real estate, precious metals, natural resources and commodities and events related to these industries, foreign investments, illiquidity, credit, interest rate fluctuations, inflation, leverage, and non-diversification. Investments in foreign securities involve risks related to adverse political and economic developments unique to a country or a region, currency fluctuations or controls, and the possibility of arbitrary action by foreign governments, including the takeover of property without adequate compensation or imposition of prohibitive taxation. Commodities are assets that have tangible properties, such as oil, metals, and agriculture. Commodities and commodity-linked derivatives may be affected by overall market movements and other factors that affect the value of a particular industry or commodity such as weather, disease, embargoes or political or regulatory developments. The value of a commodity-linked derivative is generally based on price movements of a commodity, a commodity futures contract, a commodity index or other economic variables based on the commodity markets. Derivatives use leverage, which may exaggerate a loss. Commodity investments may be subject to the risks associated with its investments in commodity-linked derivatives, risks of investing in a wholly owned subsidiary, risk of tracking error, risks of aggressive investment techniques, leverage risk, derivatives risks, counterparty risks, non-diversification risk, credit risk, concentration risk and market risk. The use of commodity-linked derivatives such as swaps, commodity-linked structured notes and futures entails substantial risks, including risk of loss of a significant portion of their principal value, lack of a secondary market, increased volatility, correlation risk, liquidity risk, interest-rate risk, market risk, credit risk, valuation risk and tax risk. Gains and losses from speculative positions in derivatives may be much greater than the derivative’s cost. At any time, the risk of loss of any individual security could be significantly higher than 50% of the security’s value. Investment in commodity markets may not be suitable for all investors.</p><br/>

<p>No part of this material may be reproduced in any form, or referred to in any other publication, without express written permission of Van Eck Securities Corporation. © 2014 Van Eck Global.</p><br/>

<p>Van Eck Securities Corporation, Distributor</p>

<p>335 Madison Avenue, New York, NY 10017</p>