What role does climate change play in the price of popular commodities?
Sal Gilbertie, CEO of Teucrium, joined Katherine Ross of TheStreet and Chris Versace, co-portfolio manager of Action Alerts PLUS, to discuss wheat prices, global warming and the importance of commodities.
In the video above, Gilbertie explained the impact of weather volatility on wheat supply and prices.
FULL VIDEO TRANSCRIPTION BELOW:
Catherine Ross: How does global warming directly impact raw materials?
Sal Gilbertie: This impacts them directly because, as you can see, volatility and weather are issues. So when you had too much rain in China two years ago, it literally caused such devastation that China imported a record amount of wheat last year.
That’s why we’re tight on wheat stocks because China has taken over, as industry pros say, wheat stocks. Why? Because they had too much rain. Last year. We didn’t get enough rain in western Canada, there was virtually no wheat crop and no canola crop and the western United States had a very difficult time with its wheat crop.
So the volatility of the weather, which you can predict is drought right now in southern Brazil and Argentina, has basically destroyed their soybean crop. Powerglide is the world’s fourth largest exporter of soybeans. They are importing soybeans this year. They had such a devastating drought.
There is no way to predict what will happen. Volatility in weather conditions is causing the volatility and the AGS which doesn’t seem to want to go away.