Agriculture still compelling despite commodities correction

First State's Renzo Casarotto says equity returns from agricultural stocks over the long term should compensate for volatility in the sector.

Adverse weather conditions in a number of key soft commodity producing countries have influenced prices in the last 12 months, with volatility stoked by the earthquake and tsunami in Japan and political turmoil in North Africa and the Middle East. Corn outperformed over the first four months of the year on the back of strong export sales and tight inventories while other commodities such as wheat, palm oil, lumber and soybeans have been weak. While short-term price moves are very difficult to forecast, there are plenty of reasons to remain optimistic about the sector. For one, low glo...