Where Technology and Hot Commodities Meet

Sean Brodrick discusses the connections between technological innovations and commodities. In this issue of Money and Markets, Mr. Brodrick takes a look at cotton and sugar and advises on how technological advances could create higher demands for natural resources.

Jupiter, Fla. (PRWEB) November 16, 2007 -- Sean Brodrick discusses the connections between technological innovations and commodities. Mr. Brodrick takes a look at cotton and sugar and advises on how technological advances could create higher demands for natural resources.

New Orleans has a very strong connection to technological innovations and two hot commodities, cotton and sugar. The story between the two illustrates the close relationship between new techniques and the natural resource demand. It's an especially important lesson for investors since sugar is currently undergoing yet another renaissance brought on by technological innovation.

Eli Whitney said he invented the cotton gin after watching a cat attempting to pull a chicken through a fence. Whitney's invention, a wooden drum stuck with hooks, pulled the cotton fibers through a mesh. The cotton seeds would not fit through the mesh and fell outside. Whitney patented his gin in 1793, and the device kicked cotton production into overdrive.

The American South had been growing cotton since before the Revolutionary War but taking the seeds out of cotton by hand was a labor intensive process. That kept cotton from becoming a hit like tobacco, indigo and rice. Whitney's invention solved the problem, and cotton became a big cash crop nearly overnight.

After the War of 1812 ended, cotton cultivation soared. Settlers moved to prairie lands of central Alabama and the rich alluvial lands along the Mississippi and Red rivers, where cotton became king. Soon enough, New Orleans became a hub of cotton trading.

Around the same time, granulated sugar became a very sweet business. Europeans were using sugar long before New Orleans came along. In fact, sugar was behind 90 percent of the battles going on in the Caribbean.

Louisiana started growing a lot of sugar, and like cotton, it all got shipped through New Orleans. In 1812, the first steamboat that ever floated on the Mississippi carried a load of sugar from New Orleans to Pittsburg. Sugar became another major commodity being shipped out of New Orleans.

People discovered that if refined sugar was dried enough, it granulated. The problem was that the process took as long as 60 to 70 days. By 1866, a new invention the first centrifugal sugar refining machine cut that time to about 70 hours. And by 1902, The New York Times reported excitedly that a new process could cut the time to 60 to 70 minutes. With each leap in technology, sugar became cheaper.

Now, almost all of the sugar sold in the U.S. goes for three times the price the rest of the world pays. Critics say the U.S. government allows the domestic sugar industry to maintain a monopoly.

This year, Brazil should become energy independent, partly because of its domestic oil production, and partly because it makes more and more ethanol from sugar. A whopping 70 percent of the cars in Brazil are "flex-fuel" meaning they can run on gasoline, ethanol or a mix of the two. Brazil is exporting sugar-cane based ethanol, though it's not coming to the U.S. yet.

"Will the U.S. make ethanol from its own sugarcane? New Orleans is already a hub of the energy industry and lots of sugar comes from Louisiana. It's hard to say. After all, sugar isn't the only crop with a lobby, and the corn lobby will do its best to keep corn as the U.S.'s top source of ethanol production. And as history shows, the combination of new technology and hot commodities can be a recipe for major success," exclaims Mr. Brodrick.

To read this issue online, please visit:

http://www.moneyandmarkets.com/Issues.aspx?NewsletterEntryId=1187

About SEAN BRODRICK & MONEY AND MARKETS

Sean Brodrick joined Weiss Research in 2000 as an analyst, bringing more than 25 years experience as a journalist and financial analyst to the position. He is Weiss Research's small-caps specialist, especially in natural resources, and is the editor of the company's Red-Hot Canadian Small-Caps, as well as a regular contributor to its daily e-letter, Money and Markets.

Previously, Mr. Brodrick was the investment director of The Sovereign Society, the world's leading publisher of offshore asset protection strategies and global investment opportunities.

Recognized for his expertise on Canadian and Australian investment opportunities, Mr. Brodrick has been featured on many financial talk shows, including CNBC Squawk Box and Bloomberg Market Line. He is a weekly guest on Market Matters Radio, a contributing columnist to MarketWatch.com and a frequent commentator on one of Canada's premiere financial websites, HoweStreet.com. His report, "70 Days to Empty," has garnered acclaim for its analysis of the forces pushing America toward its next oil crisis and was described by The Daily Reckoning as "the most important report you're likely to read this year," while his knowledge of uranium has helped investors earn solid gains on the commodity.

Mr. Brodrick holds a B.A. degree from the University of Maine.

Money and Markets (www.moneyandmarkets.com) is a free daily investment newsletter from Dr. Martin Weiss and Weiss Research analysts offering the latest investing news and financial insights for the stock market, including tips and advice on investing in gold, energy and oil. Weiss Research, Inc. is located in Jupiter, Florida. For more information about our editors, or to set up an interview, please contact Jennifer Moran at 561-627-3300 or visit www.moneyandmarkets.com.

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