Bumper Harvest: Good For Shoppers, Bad For Investors?

First the good news; American farmers are quite good at what they do. Now the bad news – we’re looking at a bumper harvest in corn and more.

The USDA estimates farmers will plant 88.8 million acres of corn this year, a 3 percent jump from each of the past two years.

And we’re looking at 78.1 million acres of soybeans in 2010, a new record, (though under a 1 percent increase from last year.)

Why’s that bad news?

It’s not if you’re like us and love to eat. But it is bad for companies that sell to farmers because the increased supply of grains will send prices tumbling.

In fact, soybeans fell the most in eight months and corn dropped to the lowest level since October, after the U.S. government said reserves at the start of the month were larger than analysts expected.

What’s the trade?

I’d look at Neogen, says Brian Kelly. They makes test kits for animal feed. There's an awful lot of corn sitting in silos and because it's been cold and wet there will be a lot of pathogens in it. Neogen makes sure its safe for the animals.

I’d play it with grain processor Archer Daniels Midland , says Tim Seymour. Even if there's an oversupply and grain prices comes down the grain has to be processed. And from a technical perspective, this stock is at the bottom of its range.




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Trader disclosure: On March 31st, 2010, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Adami Owns (INTC), (GS), (AGU), (MSFT), (NUE), (BTU), (C); Seymour Owns (AAPL), (BAC), (GE); Najarian Owns (BAC) Calls; Najarian Owns (C) Calls; Najarian Owns (CLF) Call Spread; Najarian Owns (IPI) Call Spread; Najarian Owns (JDSU); Najarian Owns (NSC) Calls; Najarian Owns (RDC) Calls; Najarian Owns (RIMM) Call Spread; Najarian Owns (SWN) Call Spread; Najarian Owns (WFR) Call Spread; Najarian Owns (YHOO) Call Spread; Finerman's Firm Is Short (IYR), (IWM), (MDY), (SPY); Finerman's Firm Is Long S&P Puts; Finerman Owns (AAPL); Finerman's Firm Owns (BAC), (BAC) Leaps; Finerman Owns (BAC) Preferred, (BAC); Finerman's Firm Owns (BSX); Finerman's Firm And Finerman Own (JPM); Finerman's Firm Owns (MUR); Finerman's Firm Owns (WFC) Preferred; Finerman's Firm Owns (YUM); Edwards Owns (GLD) For Clients; Edwards Owns (TM); Edwards Owns (UUP); Kelly Owns (FXE) Puts

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