Wow! In case you missed it, uranium futures soared on their first day of trading on the NYMEX. On Monday morning, the June 2007 contract opened at $132.05 per pound — way above last week’s spot price of $113 per pound. From there, they continued higher to $140 — a 23% rise over last week’s spot price — before settling at $135!
The spot price of uranium — which is settled at a weekly auction, is racing to catch up, hitting $120 per pound this week.
Historically speaking, the introduction of a new contract means an intermediate high in prices. That’s probably part of the reason why we saw consolidation in uranium mining shares over the last few weeks. But after that strong showing in the futures, uranium stocks jumped again on Monday.
These new uranium futures are very illiquid, and I don’t want to draw too many conclusions from the first few days of trading. We’ll probably see ups and downs in both the futures and mining stocks. However, what I’ve seen so far has been very bullish for uranium investments.
I’ll continue to keep you updated as things progress. In the meantime, I want to talk about another trend that’s quietly unfolding without much coverage from the mainstream media. And as you’ll soon see, it has serious investment implications …
Earth’s Honeybees Could Completely
Vanish Within Your Lifetime!
Our planet’s bees are vanishing, leaving behind empty hives and mystified beekeepers. In fact, this development has been so dramatic and sudden that there’s a new term for it — Colony Collapse Disorder (CCD).
About 27 states have reported CCD so far, including Florida, Georgia, Oklahoma, Pennsylvania, Wisconsin and California.
In some states, as much as 75% of commercial honeybee colonies have already vanished. And CCD is also a problem in other countries, including Brazil, Canada, and parts of Europe. In parts of Canada, beekeepers have lost up to 90% of their bees.
If you like apples … almonds … or avocados, that’s a big deal. Reason: without pollination, plenty of plants would stop bearing fruit.
Of course, it’s not just an issue of losing blueberries and broccoli. Farmers stand to lose a lot of money. In 2000, the total U.S. crop value that was wholly dependent on honeybee pollination was estimated at more than $15 billion!
Consider these three facts …
- Close to 100 crop species in the U.S. rely, to some degree, on the honeybee’s pollination services.
- Collectively, these crops make up approximately one-third of the U.S. diet.
- Honeybees are responsible for 80% of the pollination.
As you can see, if honeybees disappear, the effect on our food supply will be disastrous. What’s more, the problems could last for a number of years.
Eventually, other pollinator populations (bumble bees, mason bees, etc.) could increase to fill the gap. Still, many of these other pollinators don’t make wax or honey. And by the time nature rebalances, the price of your favorite fruits could soar by 1,000%.
What’s Behind the Decline
Of the Bee Population?
The disappearance of honeybees isn’t entirely new — between 1947 and 2005, colony numbers nationwide fell by more than 40%. Earlier declines were often associated with a series of pests and parasites, microbial diseases, and competition with Africanized bees. CCD is the latest problem, and it’s a lot harder to explain.
At one point, there was a rumor that cell phones were causing the problem. Apparently, a British newspaper started that one. In actuality, scientists found that putting a cordless phone in a hive often disrupted bees’ navigational abilities. I’m thinking it was those darned endless calls from telemarketers.
If you ask me, pesticides are the likely villain. That is, we are poisoning the bees by accident. One clue: Pests aren’t moving into the abandoned hives. Also, bees aren’t genetically equipped to handle pesticides very well.
Many pesticides used on trees and plants contain a nicotine-based ingredient called Imidacloprid. And here’s the funny thing about Imidacloprid. It was banned in France after beekeepers staged an angry protest in Paris, charging that it kills bees!
The pesticide manufacturer paid big bucks to the French beekeepers and voluntarily withdrew the product without admitting that it was the culprit.
Scientists are still studying the problem, and it could be a combination of causes. However, what if Imidacloprid turns out to be the culprit? Farmers will have to choose between saving bees they don’t own and saving crops they do own. The maker of Imidacloprid, Bayer, also has a lot of pull.
Bottom line: Saving the bees could be an uphill battle.
Two Investments for
A Coming Bee-Pocalypse
Look, I hope we find a way to avoid this disaster. But I always like to be adaptable, prepared, and wisely invested. Heck, we’ll need some extra money if blueberries go to $50 a pound.
So, with that in mind, here are two investments that would look pretty attractive should honeybees completely vanish.
#1. Monsanto (MON): Monsanto is the leader in bioengineered crops. Plus, it makes the Roundup line of pesticides and provides seeds that tolerate Roundup. If Imidacloprid is banned … and if we have to bioengineer plants to survive without bees, Monsanto could reap a windfall.
#2. Archer Daniels Midland (ADM): This company is the world’s largest processor of corn and wheat, two crops that don’t need bees. And if pollinated crops became scarce, we’d probably be eating a lot more corn and wheat! ADM is also the world’s largest producer of corn syrup, a sweet substitute for honey.
Good luck and good trades,
Sean
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