“Ags – the wheats, the corns, soyas, they’re the ones you need to own,” Marc Bailey, managing director of Bache Commodities, told Reuters in an interview Nov. 8.

“Putin has set an unprecedented tone of what the most important thing you need to do if you run a country is, and that is feed your people,” said Bailey.

To secure domestic wheat supplies after a severe drought, Russia slapped down an export ban which propelled wheat prices to two-year highs in August.

Behind soft commodities, Bailey said meats such as beef will beat those where emerging market demand is capped due to cultural or religious beliefs.

“I would prefer beef over pork – don’t underestimate the Islamic influence in pork,” he added.

Bache Commodities is the London-based unit of Prudential Financial. Bache has some $600 million under management tracking the Bache Commodities Index (BCI).

The BCI is an actively managed long only-commodity index with a maximum 49 per cent weighting to energy, 29.5 per cent to agricultural commodities and 21.5 per cent to metals sector.

Political tensions arising from competitive currency devaluation are a prime driver behind gold’s rise to record levels, and further gains are on the horizon, said Bailey.

“We’re going through a dynamic shift in the perception of what is a reserve currency,” Bailey said. “Gold is being pushed higher because it could be good as a reserve currency while we’re trying to work out what that should be.”

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