Investing in agriculture

Many reasons point to the agricultural sector as a good long-term investment:
1) worldwide population keeps growing, increasing the demand for food
2) the surface of agricultural lands is the same, keeping the offer at the same level
3) population of developing countries (in Asia, Latin America, and Africa) is increasing its standards of living and wants to eat more diverse and higher quality food, increasing the demand for agricultural products.
4) increasing use of food as an alternative energy resource (bio fuels) also increases demand for agricultural products
5) the quantitative easing policy set up by USA and Europe will lead to inflation, possibly even hyper-inflation. People lose faith in paper money and increasingly turn to hard assets and commodities.
6) human beings will always need to eat! Hence the demand for these products will never disappear.

To take advantage of this expected scenario, I will invest in two ETF's:

- the Market Vectors Agribusiness ETF (ticker: MOO, listed on the New York Stock Exchange) that invests in companies that derive their revenues from the business of agriculture. Its top 10 holdings include: Potash Corp, BRF Brasil Foods, Deere Co, Monsanto, Syngenta, Mosaic Company, Kubota Corp, Archer-Daniels-Midland, Yara International. I will buy MOO for the portfolio for a total of $10,000 at a limit price of $40. Stop loss: $29.
See the weekly chart below: MACD shows strong momentum. The 20 week moving average recently crossed the 50 week moving average to the upside, a bullish sign.


- the PowerShares DB Agriculture Fund ETF (ticker: DBA, listed on the New York Stock Exchange) that invests in futures contracts on some of the most liquid and widely traded agricultural commodities: corn, wheat, soybeans and sugar. I will buy DBA for the portfolio for a total of $10,000 at a limit price of $26.0. My stop loss is at 20$.
See the weekly chart below which shows a bullish divergence between the price and the MACD histogram, which means high probability of upside for the coming weeks/months.


I plan to hold both ETF's for the long term (several years).