Speaker 1: Broadcasting live to New York, Bloomberg eleventh wo to Washington,
Speaker 1: d C, Bloomberg to Boston, BLUEMBERG twelve hundreds to San Francisco,
Speaker 1: Bloomberg to the countries is exam General one nine and
Speaker 1: around the globe the Bloomberg Radio Plus app and Bloomberg
Speaker 1: got gone. This is taking stock, coming up on taking
Speaker 1: stock investment opportunities in corn, in soybeans, in bushels of wheat.
Speaker 1: We're gonna be speaking with Sal GILBERTI. He is the president,
Speaker 1: chief investment officer, and co founder of two Cream Trading.
Speaker 1: We'll get a look at investing in commodities right now.
Speaker 1: Let's get a look at news from Charlie Pellett in
Speaker 1: the Bloomberg newsroom. And I thank you very much, Pim Fox.
Speaker 1: The US Senate has passed the thirty seven point five
Speaker 1: billion dollar Energy and Water Spending bill that will provide
Speaker 1: funds for a private sector nuclear waste storage program, eight
Speaker 1: extensions of nuclear plant licenses, some finance research on wind energy.
Speaker 1: Charter Communications has one final regulatory approval to buy Time
Speaker 1: Warner Cable and become the second largest US cable providers.
Speaker 1: California authorities sign off on the merger Burlington Northern Santa
Speaker 1: Faces train speeds in the first quarter got back to
Speaker 1: two thousand thirteen levels. People familiar with familiar with the
Speaker 1: matter of say Germany's buyer is exploring a potential bid
Speaker 1: for US competitor Monceto, in a deal that would create
Speaker 1: the world's largest supplier of seeds and farm chemicals. Mancetto
Speaker 1: has a market value of about forty billion dollars. Buyers
Speaker 1: valued that not he's six billion. Diego Eduardo Ferro is
Speaker 1: co chief investment officer at Greylaw Capital Management. He says
Speaker 1: he's hoping antitrust concerns have been addressed if this deal happens.
Speaker 1: You know, it's interesting when you see so much money
Speaker 1: um deployed to these type of transactions before really doing
Speaker 1: the appropriate you needed. Just in terms of what what
Speaker 1: is likely to happen, I think the most obscene case
Speaker 1: has been recently Hollywood having to pay three four billion
Speaker 1: dollars for a film merger. Right now, we've got the
Speaker 1: Dow Jones Industrial Average advancing a thirty three points, up
Speaker 1: two tenths of one percent, the SMP hired by two
Speaker 1: points of point one percent. NASDAK little change down sixteen
Speaker 1: points to drop there of four tenths of one percent.
Speaker 1: More trouble in retail today Calls down nine point six
Speaker 1: percent after posting week results. Gold down to fifty the
Speaker 1: ounce to twelve seventy three, a drop there of two
Speaker 1: tenths of one percent, Crewed up seven tenths of one percent,
Speaker 1: forty six fifty seven apare home and now at to
Speaker 1: thirty two on Wall Street. Let's take a look at
Speaker 1: other news from around the world. Thank you Charlie from
Speaker 1: the Bloomberg News Room. My Rami in a censio. This
Speaker 1: news update is brought to you by benzel Bush Motor
Speaker 1: Car in Anglewood, New Jersey, offering a commitment to service,
Speaker 1: luxury and value with total transparency from America's premier automotive dealership.
Speaker 1: To find the way you drop, I've at benzel Bush
Speaker 1: dot com. After meeting with Republican presumptive nominee Donald Trump
Speaker 1: this morning, how Speaker Paul Ryan says he is quote
Speaker 1: totally committed to working together. Look, it's no secret that
Speaker 1: Donald Trump and I have had our differences. We talked
Speaker 1: about those differences today. That's common knowledge. Um. The question
Speaker 1: is what is it that we need to do to
Speaker 1: unify the Republican Party. Ryan has said he is not
Speaker 1: ready to endorse Trump for president. Meanwhile, Trump is narrowing
Speaker 1: down his choices of a possible running mate. Bloomberg's Michael
Speaker 1: Barr fills us in. Donald Trump is thinking about selecting
Speaker 1: former House Speaker Newt Ginbridge as his vice presidential running mate.
Speaker 1: That's according to several people familiar with the situation. The
Speaker 1: presumptive Republican presidential nominee has been asking his inner circle
Speaker 1: on Gingridge as a potential pick. Trump has said he
Speaker 1: has narrowed his vice presidential list to five or six candidates.
Speaker 1: Some of the names on the list include Oklahoma Governor
Speaker 1: Mary Fallon and former Arizona the governor Jan Brewer, Michael Barr,
Speaker 1: Bloomberg Radio. Five years in prison for Dean Skelos, the
Speaker 1: once powerful New York politician convicted of using his position
Speaker 1: as Senate majority leader to pressure companies to provide hundreds
Speaker 1: of thousands of dollars for his son, learned his fate
Speaker 1: earlier today. His son, Adam Skellos, was sentenced to six
Speaker 1: and a half years behind bars. Global News twenty four
Speaker 1: hours a day, powered by our journalists in more than
Speaker 1: one fifty news bureaus around the world. From the Bloomberg
Speaker 1: News Room, I'm Ramie in escent Cio, Charlie, and we
Speaker 1: thank you and again recapping stocks higher SMP five hundred
Speaker 1: index up point now to two thousand sixty five, a
Speaker 1: gain of point one percent. I'm Charlie Peloton. That's a
Speaker 1: Bloomberg Business flash. You're listening to taking stock with Kathleen
Speaker 1: Hay and Pim Fox on Bloomberg Radio. Drought drought is
Speaker 1: cutting the wheat production in South Africa to a four
Speaker 1: year low. The wheat crop is estimated to be cut
Speaker 1: by about eighteen percent. Does this offer an investment opportunity?
Speaker 1: Let's find out from Sal GILBERTI. He is the president
Speaker 1: and the chief investment officer and co founder of two
Speaker 1: Creum Trading LLC. He's based in Brattle Burrow, Vermont, South
Speaker 1: Thank you very much for being with us. Good to
Speaker 1: be here. Just tell us a little bit about two
Speaker 1: Creum Trading and what it is you specialize in and
Speaker 1: how you came to find this particular area of investments. Sure, um, Well,
Speaker 1: I started way back at cargill Um in the eighties,
Speaker 1: and so I've always had interest in energy and agriculture
Speaker 1: come from an agricultural family. And um, there weren't any
Speaker 1: e T s um single commodity ets available once e
Speaker 1: T S became popular with it particularly for gold and oil,
Speaker 1: for single commodity AGGS, and and for corn, which is
Speaker 1: just an enormously important crop globally. And so I started
Speaker 1: to graham with some partners and some investors, and we
Speaker 1: are the sponsors of single commodity e t F to
Speaker 1: trade on the New York Stock Exchange ETPs um. Corn
Speaker 1: is the corn fund tickers c O r N, Wheat
Speaker 1: is a wheat fund, easy tickers w E A t UH,
Speaker 1: soybeans s oy B, and sugar is kNs c A
Speaker 1: N E. And so we we believe that investors buy
Speaker 1: and large the large majority investors don't trade futures. They
Speaker 1: don't have access to futures, they don't have the expertise
Speaker 1: they need to trade a leverage product like that. And
Speaker 1: we develop these et p s in order for the
Speaker 1: the average investor, M retailing institutional to gain direct exposure
Speaker 1: to these important agricultural products right on the New York
Speaker 1: Stock Exchange. Well, so let's speak and by talking about
Speaker 1: corn then because I note that corn futures for July
Speaker 1: delivery up about one percent to three dollars and eighty
Speaker 1: two cents a bushel tell us about the long term
Speaker 1: trends in corn. Long term trends and corn, along with
Speaker 1: soybeans and wheat, are the usage continues to increase. It's
Speaker 1: it's primarily driven by population growth. Globally, the population expands
Speaker 1: by roughly seventy five to seventy eight million people per year,
Speaker 1: which is to put that in perspective, it's hard for
Speaker 1: me to grasp those numbers. That's two states of California.
Speaker 1: It's the equivalent of the population of California doubling every
Speaker 1: year as new added population on the planet Earth. And
Speaker 1: in order to sustain the use of of the agricultural
Speaker 1: commodities that all those people use, you would need arable
Speaker 1: land added to what is already arable land, um twice
Speaker 1: the size of Vermont. That land area to be added
Speaker 1: every year just to feed the new people and corn,
Speaker 1: corners and everything. If you if you go to fill
Speaker 1: up your suv a service station, UM, You're going to
Speaker 1: use about a bushel of corn because of the ethanol
Speaker 1: content of that gasoline. That's corn's number one use in
Speaker 1: the United States, it's actually the number two used globally. Globally,
Speaker 1: the number one used for corn is animal feed and
Speaker 1: so any meats that you consume, any animal proteins that
Speaker 1: you can sue, including aquacultural raised fish, that's going to
Speaker 1: use corn as well. That's corns second largest use. If
Speaker 1: you use paper, you're looking at corn starch to hold
Speaker 1: that together. If you drink sweet and drinks corn syrup.
Speaker 1: Those are corn top four uses. They you know, the
Speaker 1: little plastic cups should get at summertime picnics with the
Speaker 1: green stripe around them, they're made from corn. Um. Consumers
Speaker 1: in the modern global economy cannot exist without corn touching
Speaker 1: their lives during the day, every day in multiple spots.
Speaker 1: And so corn is an incredibly critical commodity that people
Speaker 1: should look at with their financial advisors, because you know,
Speaker 1: most people with whom we speak they have oil exposure.
Speaker 1: They understand that no matter what happens to the economy,
Speaker 1: they're gonna get up, they're gonna turn their heat on
Speaker 1: or off, they're going to drive their car um, They're
Speaker 1: going to use energy, but they're also going to use food,
Speaker 1: and they're going to use the products that also UM
Speaker 1: are derived from these these crops of corn, soybeans, and
Speaker 1: wheat in particular, So you're bullish on the price action
Speaker 1: in corn, soybeans, and wheat UM. I think when you
Speaker 1: step back and look at it, the global demand is
Speaker 1: such that I'm definitely bullish on usage. So I have
Speaker 1: no doubt that we will use more of those commodities
Speaker 1: over time as time goes on deep into the future.
Speaker 1: In terms of price action, you know, we've seen global
Speaker 1: usage going up, but the past three years have been
Speaker 1: in deep bear markets for for all of these commodities,
Speaker 1: and the reason is that they're supply driven. The demand
Speaker 1: is very steady, it's very inelastic. Farmers respond very quickly,
Speaker 1: and so what you have is we've had perfect weather
Speaker 1: for three consecutive years and that's given us um ample crops,
Speaker 1: ample supplies. But with the usage basically unrelenting, it's growing
Speaker 1: at an amazing rate, particularly soybeans and China China UM.
Speaker 1: You know their economy. I was just listening to a
Speaker 1: webinar from JPMorgan Asset Management. They were highlighting how the
Speaker 1: Chinese GDP contribution to growth has declines in two thousand nine,
Speaker 1: yet the imports of soybeans, of rocketed So I find
Speaker 1: it very interesting that the last thing people will do
Speaker 1: is allow themselves or the animals to be cold or hungry,
Speaker 1: and yet many people overlook agricultural commodity is a key
Speaker 1: component of exposure in their portfolios. Now, so you begin
Speaker 1: by just talking about futures, is using e t ps?
Speaker 1: Is that less volatile than futures trading? Uh? Not necessarily
Speaker 1: e tps because they hold futures and are there unleveraged UM.
Speaker 1: So you know, they make it pretty easy to understand.
Speaker 1: But because they hold futures, they are likely to be
Speaker 1: as volatile as futures. I think the advantage to using
Speaker 1: an et P is one doesn't need the expertise to
Speaker 1: deal with UM the leverage the futures entail, and one
Speaker 1: doesn't need the expertise to roll. Remember, contracts expire and
Speaker 1: you have to either do something about that if you
Speaker 1: own it, or you know, a whole bunch of corn
Speaker 1: roll it every month. Thank you very much, Sal GILBERTI.
Speaker 1: He is the president and the chief investment officer and
Speaker 1: co founder of two Creum Trading. They're based in Brattleborough, Vermont.
Speaker 1: Bloomer Taking Stock is brought to by Autie Metal Ends
Speaker 1: in Secauka's New Jersey, powered by Benzel Bush, offering a
Speaker 1: commitment to service, luxury and value with total transparency. Start
Speaker 1: your journey at Audie medal ends dot net and define
Speaker 1: the way you drive.