1 00:00:03,840 --> 00:00:08,160 Speaker 1: Broadcasting live to New York, Bloomberg eleventh wo to Washington, 2 00:00:08,240 --> 00:00:13,280 Speaker 1: d C, Bloomberg to Boston, BLUEMBERG twelve hundreds to San Francisco, 3 00:00:13,400 --> 00:00:17,840 Speaker 1: Bloomberg to the countries is exam General one nine and 4 00:00:17,960 --> 00:00:21,280 Speaker 1: around the globe the Bloomberg Radio Plus app and Bloomberg 5 00:00:21,280 --> 00:00:25,040 Speaker 1: got gone. This is taking stock, coming up on taking 6 00:00:25,120 --> 00:00:31,040 Speaker 1: stock investment opportunities in corn, in soybeans, in bushels of wheat. 7 00:00:31,240 --> 00:00:34,040 Speaker 1: We're gonna be speaking with Sal GILBERTI. He is the president, 8 00:00:34,080 --> 00:00:38,000 Speaker 1: chief investment officer, and co founder of two Cream Trading. 9 00:00:38,240 --> 00:00:41,240 Speaker 1: We'll get a look at investing in commodities right now. 10 00:00:41,440 --> 00:00:43,479 Speaker 1: Let's get a look at news from Charlie Pellett in 11 00:00:43,479 --> 00:00:46,560 Speaker 1: the Bloomberg newsroom. And I thank you very much, Pim Fox. 12 00:00:46,600 --> 00:00:49,240 Speaker 1: The US Senate has passed the thirty seven point five 13 00:00:49,320 --> 00:00:53,120 Speaker 1: billion dollar Energy and Water Spending bill that will provide 14 00:00:53,159 --> 00:00:57,560 Speaker 1: funds for a private sector nuclear waste storage program, eight 15 00:00:57,560 --> 00:01:03,000 Speaker 1: extensions of nuclear plant licenses, some finance research on wind energy. 16 00:01:03,480 --> 00:01:07,199 Speaker 1: Charter Communications has one final regulatory approval to buy Time 17 00:01:07,240 --> 00:01:11,520 Speaker 1: Warner Cable and become the second largest US cable providers. 18 00:01:11,560 --> 00:01:16,800 Speaker 1: California authorities sign off on the merger Burlington Northern Santa 19 00:01:16,840 --> 00:01:19,720 Speaker 1: Faces train speeds in the first quarter got back to 20 00:01:19,800 --> 00:01:23,800 Speaker 1: two thousand thirteen levels. People familiar with familiar with the 21 00:01:23,840 --> 00:01:27,240 Speaker 1: matter of say Germany's buyer is exploring a potential bid 22 00:01:27,280 --> 00:01:30,959 Speaker 1: for US competitor Monceto, in a deal that would create 23 00:01:31,000 --> 00:01:36,120 Speaker 1: the world's largest supplier of seeds and farm chemicals. Mancetto 24 00:01:36,200 --> 00:01:39,320 Speaker 1: has a market value of about forty billion dollars. Buyers 25 00:01:39,440 --> 00:01:42,960 Speaker 1: valued that not he's six billion. Diego Eduardo Ferro is 26 00:01:43,040 --> 00:01:46,440 Speaker 1: co chief investment officer at Greylaw Capital Management. He says 27 00:01:46,520 --> 00:01:50,720 Speaker 1: he's hoping antitrust concerns have been addressed if this deal happens. 28 00:01:50,760 --> 00:01:54,559 Speaker 1: You know, it's interesting when you see so much money 29 00:01:55,160 --> 00:01:59,080 Speaker 1: um deployed to these type of transactions before really doing 30 00:01:59,120 --> 00:02:01,240 Speaker 1: the appropriate you needed. Just in terms of what what 31 00:02:01,440 --> 00:02:03,400 Speaker 1: is likely to happen, I think the most obscene case 32 00:02:03,440 --> 00:02:06,720 Speaker 1: has been recently Hollywood having to pay three four billion 33 00:02:06,720 --> 00:02:09,760 Speaker 1: dollars for a film merger. Right now, we've got the 34 00:02:09,800 --> 00:02:13,120 Speaker 1: Dow Jones Industrial Average advancing a thirty three points, up 35 00:02:13,120 --> 00:02:15,680 Speaker 1: two tenths of one percent, the SMP hired by two 36 00:02:15,720 --> 00:02:19,799 Speaker 1: points of point one percent. NASDAK little change down sixteen 37 00:02:19,800 --> 00:02:22,280 Speaker 1: points to drop there of four tenths of one percent. 38 00:02:22,760 --> 00:02:26,080 Speaker 1: More trouble in retail today Calls down nine point six 39 00:02:26,120 --> 00:02:30,040 Speaker 1: percent after posting week results. Gold down to fifty the 40 00:02:30,080 --> 00:02:32,320 Speaker 1: ounce to twelve seventy three, a drop there of two 41 00:02:32,360 --> 00:02:35,639 Speaker 1: tenths of one percent, Crewed up seven tenths of one percent, 42 00:02:35,919 --> 00:02:39,679 Speaker 1: forty six fifty seven apare home and now at to 43 00:02:39,919 --> 00:02:41,680 Speaker 1: thirty two on Wall Street. Let's take a look at 44 00:02:41,680 --> 00:02:45,680 Speaker 1: other news from around the world. Thank you Charlie from 45 00:02:45,680 --> 00:02:48,480 Speaker 1: the Bloomberg News Room. My Rami in a censio. This 46 00:02:48,520 --> 00:02:50,720 Speaker 1: news update is brought to you by benzel Bush Motor 47 00:02:50,720 --> 00:02:54,000 Speaker 1: Car in Anglewood, New Jersey, offering a commitment to service, 48 00:02:54,120 --> 00:02:59,000 Speaker 1: luxury and value with total transparency from America's premier automotive dealership. 49 00:02:59,200 --> 00:03:00,920 Speaker 1: To find the way you drop, I've at benzel Bush 50 00:03:00,960 --> 00:03:04,799 Speaker 1: dot com. After meeting with Republican presumptive nominee Donald Trump 51 00:03:04,800 --> 00:03:07,160 Speaker 1: this morning, how Speaker Paul Ryan says he is quote 52 00:03:07,320 --> 00:03:10,680 Speaker 1: totally committed to working together. Look, it's no secret that 53 00:03:10,720 --> 00:03:13,480 Speaker 1: Donald Trump and I have had our differences. We talked 54 00:03:13,480 --> 00:03:18,760 Speaker 1: about those differences today. That's common knowledge. Um. The question 55 00:03:18,880 --> 00:03:21,440 Speaker 1: is what is it that we need to do to 56 00:03:21,560 --> 00:03:24,480 Speaker 1: unify the Republican Party. Ryan has said he is not 57 00:03:24,600 --> 00:03:28,360 Speaker 1: ready to endorse Trump for president. Meanwhile, Trump is narrowing 58 00:03:28,400 --> 00:03:31,320 Speaker 1: down his choices of a possible running mate. Bloomberg's Michael 59 00:03:31,320 --> 00:03:34,639 Speaker 1: Barr fills us in. Donald Trump is thinking about selecting 60 00:03:34,680 --> 00:03:39,040 Speaker 1: former House Speaker Newt Ginbridge as his vice presidential running mate. 61 00:03:39,400 --> 00:03:42,840 Speaker 1: That's according to several people familiar with the situation. The 62 00:03:42,880 --> 00:03:47,040 Speaker 1: presumptive Republican presidential nominee has been asking his inner circle 63 00:03:47,080 --> 00:03:50,400 Speaker 1: on Gingridge as a potential pick. Trump has said he 64 00:03:50,440 --> 00:03:54,720 Speaker 1: has narrowed his vice presidential list to five or six candidates. 65 00:03:55,080 --> 00:03:57,720 Speaker 1: Some of the names on the list include Oklahoma Governor 66 00:03:57,840 --> 00:04:02,480 Speaker 1: Mary Fallon and former Arizona the governor Jan Brewer, Michael Barr, 67 00:04:02,520 --> 00:04:06,160 Speaker 1: Bloomberg Radio. Five years in prison for Dean Skelos, the 68 00:04:06,200 --> 00:04:09,280 Speaker 1: once powerful New York politician convicted of using his position 69 00:04:09,320 --> 00:04:12,840 Speaker 1: as Senate majority leader to pressure companies to provide hundreds 70 00:04:12,840 --> 00:04:15,720 Speaker 1: of thousands of dollars for his son, learned his fate 71 00:04:15,760 --> 00:04:19,200 Speaker 1: earlier today. His son, Adam Skellos, was sentenced to six 72 00:04:19,240 --> 00:04:22,160 Speaker 1: and a half years behind bars. Global News twenty four 73 00:04:22,200 --> 00:04:24,720 Speaker 1: hours a day, powered by our journalists in more than 74 00:04:24,720 --> 00:04:27,680 Speaker 1: one fifty news bureaus around the world. From the Bloomberg 75 00:04:27,680 --> 00:04:30,479 Speaker 1: News Room, I'm Ramie in escent Cio, Charlie, and we 76 00:04:30,560 --> 00:04:33,839 Speaker 1: thank you and again recapping stocks higher SMP five hundred 77 00:04:33,880 --> 00:04:36,720 Speaker 1: index up point now to two thousand sixty five, a 78 00:04:36,800 --> 00:04:40,240 Speaker 1: gain of point one percent. I'm Charlie Peloton. That's a 79 00:04:40,320 --> 00:04:45,240 Speaker 1: Bloomberg Business flash. You're listening to taking stock with Kathleen 80 00:04:45,279 --> 00:04:50,080 Speaker 1: Hay and Pim Fox on Bloomberg Radio. Drought drought is 81 00:04:50,200 --> 00:04:54,920 Speaker 1: cutting the wheat production in South Africa to a four 82 00:04:55,240 --> 00:04:59,279 Speaker 1: year low. The wheat crop is estimated to be cut 83 00:04:59,360 --> 00:05:04,200 Speaker 1: by about eighteen percent. Does this offer an investment opportunity? 84 00:05:04,600 --> 00:05:07,440 Speaker 1: Let's find out from Sal GILBERTI. He is the president 85 00:05:07,480 --> 00:05:10,920 Speaker 1: and the chief investment officer and co founder of two 86 00:05:10,960 --> 00:05:15,520 Speaker 1: Creum Trading LLC. He's based in Brattle Burrow, Vermont, South 87 00:05:15,600 --> 00:05:17,599 Speaker 1: Thank you very much for being with us. Good to 88 00:05:17,600 --> 00:05:20,400 Speaker 1: be here. Just tell us a little bit about two 89 00:05:20,440 --> 00:05:24,080 Speaker 1: Creum Trading and what it is you specialize in and 90 00:05:24,160 --> 00:05:29,520 Speaker 1: how you came to find this particular area of investments. Sure, um, Well, 91 00:05:29,520 --> 00:05:32,600 Speaker 1: I started way back at cargill Um in the eighties, 92 00:05:32,640 --> 00:05:35,640 Speaker 1: and so I've always had interest in energy and agriculture 93 00:05:35,720 --> 00:05:39,560 Speaker 1: come from an agricultural family. And um, there weren't any 94 00:05:39,600 --> 00:05:43,360 Speaker 1: e T s um single commodity ets available once e 95 00:05:43,440 --> 00:05:46,279 Speaker 1: T S became popular with it particularly for gold and oil, 96 00:05:46,600 --> 00:05:49,800 Speaker 1: for single commodity AGGS, and and for corn, which is 97 00:05:49,880 --> 00:05:54,880 Speaker 1: just an enormously important crop globally. And so I started 98 00:05:54,920 --> 00:05:57,400 Speaker 1: to graham with some partners and some investors, and we 99 00:05:57,520 --> 00:06:00,920 Speaker 1: are the sponsors of single commodity e t F to 100 00:06:00,960 --> 00:06:04,400 Speaker 1: trade on the New York Stock Exchange ETPs um. Corn 101 00:06:04,760 --> 00:06:07,240 Speaker 1: is the corn fund tickers c O r N, Wheat 102 00:06:07,400 --> 00:06:10,320 Speaker 1: is a wheat fund, easy tickers w E A t UH, 103 00:06:10,320 --> 00:06:13,680 Speaker 1: soybeans s oy B, and sugar is kNs c A 104 00:06:13,839 --> 00:06:17,320 Speaker 1: N E. And so we we believe that investors buy 105 00:06:17,360 --> 00:06:19,960 Speaker 1: and large the large majority investors don't trade futures. They 106 00:06:19,960 --> 00:06:23,040 Speaker 1: don't have access to futures, they don't have the expertise 107 00:06:23,520 --> 00:06:26,720 Speaker 1: they need to trade a leverage product like that. And 108 00:06:27,240 --> 00:06:29,680 Speaker 1: we develop these et p s in order for the 109 00:06:29,680 --> 00:06:34,600 Speaker 1: the average investor, M retailing institutional to gain direct exposure 110 00:06:34,640 --> 00:06:37,120 Speaker 1: to these important agricultural products right on the New York 111 00:06:37,120 --> 00:06:39,640 Speaker 1: Stock Exchange. Well, so let's speak and by talking about 112 00:06:39,680 --> 00:06:42,320 Speaker 1: corn then because I note that corn futures for July 113 00:06:42,520 --> 00:06:45,480 Speaker 1: delivery up about one percent to three dollars and eighty 114 00:06:45,560 --> 00:06:50,400 Speaker 1: two cents a bushel tell us about the long term 115 00:06:50,480 --> 00:06:53,920 Speaker 1: trends in corn. Long term trends and corn, along with 116 00:06:54,279 --> 00:06:57,880 Speaker 1: soybeans and wheat, are the usage continues to increase. It's 117 00:06:57,960 --> 00:07:02,520 Speaker 1: it's primarily driven by population growth. Globally, the population expands 118 00:07:02,600 --> 00:07:06,080 Speaker 1: by roughly seventy five to seventy eight million people per year, 119 00:07:06,360 --> 00:07:08,480 Speaker 1: which is to put that in perspective, it's hard for 120 00:07:08,480 --> 00:07:11,800 Speaker 1: me to grasp those numbers. That's two states of California. 121 00:07:11,800 --> 00:07:14,600 Speaker 1: It's the equivalent of the population of California doubling every 122 00:07:14,680 --> 00:07:17,760 Speaker 1: year as new added population on the planet Earth. And 123 00:07:17,800 --> 00:07:21,560 Speaker 1: in order to sustain the use of of the agricultural 124 00:07:21,560 --> 00:07:24,760 Speaker 1: commodities that all those people use, you would need arable 125 00:07:24,880 --> 00:07:28,760 Speaker 1: land added to what is already arable land, um twice 126 00:07:28,760 --> 00:07:31,320 Speaker 1: the size of Vermont. That land area to be added 127 00:07:31,760 --> 00:07:34,520 Speaker 1: every year just to feed the new people and corn, 128 00:07:34,920 --> 00:07:36,760 Speaker 1: corners and everything. If you if you go to fill 129 00:07:36,840 --> 00:07:39,440 Speaker 1: up your suv a service station, UM, You're going to 130 00:07:39,560 --> 00:07:41,760 Speaker 1: use about a bushel of corn because of the ethanol 131 00:07:41,800 --> 00:07:44,680 Speaker 1: content of that gasoline. That's corn's number one use in 132 00:07:44,680 --> 00:07:48,240 Speaker 1: the United States, it's actually the number two used globally. Globally, 133 00:07:48,520 --> 00:07:51,600 Speaker 1: the number one used for corn is animal feed and 134 00:07:51,640 --> 00:07:54,560 Speaker 1: so any meats that you consume, any animal proteins that 135 00:07:54,600 --> 00:07:58,080 Speaker 1: you can sue, including aquacultural raised fish, that's going to 136 00:07:58,200 --> 00:08:01,120 Speaker 1: use corn as well. That's corns second largest use. If 137 00:08:01,120 --> 00:08:03,880 Speaker 1: you use paper, you're looking at corn starch to hold 138 00:08:03,960 --> 00:08:06,560 Speaker 1: that together. If you drink sweet and drinks corn syrup. 139 00:08:06,800 --> 00:08:09,000 Speaker 1: Those are corn top four uses. They you know, the 140 00:08:09,040 --> 00:08:11,280 Speaker 1: little plastic cups should get at summertime picnics with the 141 00:08:11,320 --> 00:08:14,720 Speaker 1: green stripe around them, they're made from corn. Um. Consumers 142 00:08:15,080 --> 00:08:19,920 Speaker 1: in the modern global economy cannot exist without corn touching 143 00:08:19,960 --> 00:08:23,720 Speaker 1: their lives during the day, every day in multiple spots. 144 00:08:23,760 --> 00:08:27,760 Speaker 1: And so corn is an incredibly critical commodity that people 145 00:08:28,000 --> 00:08:30,840 Speaker 1: should look at with their financial advisors, because you know, 146 00:08:30,880 --> 00:08:33,640 Speaker 1: most people with whom we speak they have oil exposure. 147 00:08:33,640 --> 00:08:36,120 Speaker 1: They understand that no matter what happens to the economy, 148 00:08:36,160 --> 00:08:38,040 Speaker 1: they're gonna get up, they're gonna turn their heat on 149 00:08:38,120 --> 00:08:41,360 Speaker 1: or off, they're going to drive their car um, They're 150 00:08:41,400 --> 00:08:43,920 Speaker 1: going to use energy, but they're also going to use food, 151 00:08:44,040 --> 00:08:46,920 Speaker 1: and they're going to use the products that also UM 152 00:08:47,160 --> 00:08:50,959 Speaker 1: are derived from these these crops of corn, soybeans, and 153 00:08:50,960 --> 00:08:54,480 Speaker 1: wheat in particular, So you're bullish on the price action 154 00:08:54,640 --> 00:08:58,960 Speaker 1: in corn, soybeans, and wheat UM. I think when you 155 00:08:59,040 --> 00:09:01,920 Speaker 1: step back and look at it, the global demand is 156 00:09:01,960 --> 00:09:06,640 Speaker 1: such that I'm definitely bullish on usage. So I have 157 00:09:06,760 --> 00:09:08,960 Speaker 1: no doubt that we will use more of those commodities 158 00:09:09,000 --> 00:09:11,200 Speaker 1: over time as time goes on deep into the future. 159 00:09:11,400 --> 00:09:13,880 Speaker 1: In terms of price action, you know, we've seen global 160 00:09:13,920 --> 00:09:15,880 Speaker 1: usage going up, but the past three years have been 161 00:09:15,880 --> 00:09:18,679 Speaker 1: in deep bear markets for for all of these commodities, 162 00:09:18,840 --> 00:09:22,200 Speaker 1: and the reason is that they're supply driven. The demand 163 00:09:22,280 --> 00:09:26,160 Speaker 1: is very steady, it's very inelastic. Farmers respond very quickly, 164 00:09:26,480 --> 00:09:29,080 Speaker 1: and so what you have is we've had perfect weather 165 00:09:29,160 --> 00:09:33,280 Speaker 1: for three consecutive years and that's given us um ample crops, 166 00:09:33,360 --> 00:09:39,240 Speaker 1: ample supplies. But with the usage basically unrelenting, it's growing 167 00:09:39,800 --> 00:09:43,600 Speaker 1: at an amazing rate, particularly soybeans and China China UM. 168 00:09:43,920 --> 00:09:46,080 Speaker 1: You know their economy. I was just listening to a 169 00:09:46,080 --> 00:09:49,400 Speaker 1: webinar from JPMorgan Asset Management. They were highlighting how the 170 00:09:49,559 --> 00:09:54,200 Speaker 1: Chinese GDP contribution to growth has declines in two thousand nine, 171 00:09:54,280 --> 00:09:57,880 Speaker 1: yet the imports of soybeans, of rocketed So I find 172 00:09:57,920 --> 00:10:00,720 Speaker 1: it very interesting that the last thing people will do 173 00:10:00,840 --> 00:10:03,600 Speaker 1: is allow themselves or the animals to be cold or hungry, 174 00:10:04,000 --> 00:10:08,160 Speaker 1: and yet many people overlook agricultural commodity is a key 175 00:10:08,200 --> 00:10:11,880 Speaker 1: component of exposure in their portfolios. Now, so you begin 176 00:10:11,960 --> 00:10:15,439 Speaker 1: by just talking about futures, is using e t ps? 177 00:10:15,520 --> 00:10:20,160 Speaker 1: Is that less volatile than futures trading? Uh? Not necessarily 178 00:10:20,240 --> 00:10:24,319 Speaker 1: e tps because they hold futures and are there unleveraged UM. 179 00:10:24,440 --> 00:10:26,520 Speaker 1: So you know, they make it pretty easy to understand. 180 00:10:26,760 --> 00:10:28,800 Speaker 1: But because they hold futures, they are likely to be 181 00:10:28,880 --> 00:10:32,120 Speaker 1: as volatile as futures. I think the advantage to using 182 00:10:32,120 --> 00:10:34,960 Speaker 1: an et P is one doesn't need the expertise to 183 00:10:35,120 --> 00:10:39,080 Speaker 1: deal with UM the leverage the futures entail, and one 184 00:10:39,080 --> 00:10:42,800 Speaker 1: doesn't need the expertise to roll. Remember, contracts expire and 185 00:10:42,880 --> 00:10:45,720 Speaker 1: you have to either do something about that if you 186 00:10:45,760 --> 00:10:47,480 Speaker 1: own it, or you know, a whole bunch of corn 187 00:10:47,880 --> 00:10:50,960 Speaker 1: roll it every month. Thank you very much, Sal GILBERTI. 188 00:10:51,120 --> 00:10:53,280 Speaker 1: He is the president and the chief investment officer and 189 00:10:53,360 --> 00:10:58,040 Speaker 1: co founder of two Creum Trading. They're based in Brattleborough, Vermont. 190 00:11:00,600 --> 00:11:03,240 Speaker 1: Bloomer Taking Stock is brought to by Autie Metal Ends 191 00:11:03,240 --> 00:11:06,000 Speaker 1: in Secauka's New Jersey, powered by Benzel Bush, offering a 192 00:11:06,000 --> 00:11:09,600 Speaker 1: commitment to service, luxury and value with total transparency. Start 193 00:11:09,600 --> 00:11:11,800 Speaker 1: your journey at Audie medal ends dot net and define 194 00:11:11,840 --> 00:11:12,840 Speaker 1: the way you drive.