How come when oil prices rise, the agriculture stocks tend to rise, why is this?

Michael V · #1 (**permalink**) 04-22-2008, 06:35 AM

I noticed every time the price of oil rises, the agriculture stocks tend to go up in share price also. Does anyone know is this is the case, and if so, why?

gosh137 · #2 (**permalink**) 04-22-2008, 06:37 AM

When the price of gasoline rises it makes biofuel (ethanol, biodiesel) more attractive. They are made from (so increase demand for) corn, soybeans, canola, sugar cane, etc.

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