South American Farmland Co. Adecoagro is Soros' Largest Holding As of 6/30/2011

AGRO vs. CORN, CCI Index, S&P GSCI Commodities Index (StockCharts)
I've been tracking Adecoagro (NYSE:AGRO) since it went public in January and it is Soros Fund Management's largest holding as of 6/30/2011, worth $264.4 million (13F SEC Filing). The fund sold 2.62% of its shares during Q2, so we'll see if Soros dumped it or added to his position after June 30 (See AGRO's institutional holdings at nasdaq). The stock is down 26% from its post IPO high of $13.5 smackers. Is this action pricing in future food price declines from a global recession (if that's what markets are pricing in) and monetary tightening in China?

AGRO fell in tandem with the World Bank Food Index, S&P GSCI Commodities Index and Reuters-CRB CCI Commodities Index after the World Bank Food Index peaked in February 2011. The CORN ETF, on the other hand, is testing the June highs which is interesting. The recent USDA corp production report was bullish for corn, read more at AgJournal. In the World Bank report, China, Ethiopia, Guatemala and Vietnam saw huge food price moves. Ethiopian food prices are up 45% year-over-year and its currency depreciated against the Dollar. So, back to the original topic of this post. Adecoagro is a huge agricultural commodities play if the ag boom continues.

"Adecoagro is a leading agricultural company in South America. Adecoagro owns over 283 thousand hectares of farmland and several industrial facilities spread across the most productive regions of Argentina, Brazil and Uruguay, where it produces over 1 million tons of agricultural products including corn, wheat, soybeans, rice, dairy products, sugar, ethanol and electricity among others.

Adecoagro just bought "Compania Agroforestal de Servicios y Mandatos S.A., a company which owns a 4,960 hectare farm named "El Colorado", located in the region of Bandera, in the province of Santiago del Estero, Argentina, for a total price of US$18.0 million." (8/19/2011 press release).

The August World Bank Food Price Watch report said food prices are up significantly from July 2010, but down from February. Also, there's a humanitarian crisis in the horn of Africa. The report broke out food prices from the World Bank Food Price Index. The U.S. Dollar is also at 3 year lows and its next big move will probably drive food prices imo.

World Bank Food Price Index 2008-July 2011
"Food Price Trends

Global food prices in July 2011 remain significantly higher than their levels in July 2010. On average, the World Bank Food Price Index remains 33 percent above its level a year ago. Similarly, price levels of a number of major commodities are higher than their levels in July last year, for example, maize (84 percent), sugar (62 percent), wheat (55 percent), and soybean oil (47 percent). Crude oil prices remain 45 percent higher than a year ago and the price of fertilizers increased by 67 percent over the same period.

Prices have declined slightly after peaking in February 2011, although prices remain volatile for specific commodities. After peaking in February 2011, the World Bank Food Price Index for the period April to July averaged 278.3, or roughly 5 percent below the price index in February (see figure 1). This has been accompanied by modest declines in the prices of the major components of the index in July from their February averages: grains (1 percent), fats and oil (9 percent) and the "other" food category (1 percent), which includes meat, fruits, and sugar (see table 1). However, these averages conceal volatility within this period. For example, maize and wheat prices declined in June and then increased in the first half of July. The price of rice fell from February to May, but has since increased." (continue reading at

Other articles on the agricultural sector / farmland:

Ag ETFs Up 1% As Inventories Sink; Deere Sees Prices Rising ("USDA slashed its estimates on the size of corn and soybean crops, putting further pressure on already stretched stockpiles") - (Barron's)

Being Like Soros in Buying Farmland Reaps Annual Gains of 16% - (Bloomberg)

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