By DOUG GRAVES
Ohio Correspondent

WASHINGTON, D.C. — Base and precious metals such as gold, silver, platinum and aluminum may be coveted by investors who keep an eye on the stock exchange, but some analysts say agricultural commodities just may be the way to invest.

“Agricultural commodities are expected to outperform metals and oil in 2009,” said Lawrence Eagles, a commodities analyst at JP Morgan. “They’ll be benefiting from a secure demand outlook and tight supplies, after the dust settles from the sell-off across commodities triggered by the global financial crisis.”

After a roaring start to the year, most agricultural commodity prices have roughly halved in recent months, acting as a disincentive for farmers to invest in production. But, Eagles points out, agricultural commodities show the ability to rebound quickly.

“Unlike oil and metals, agriculture is more resilient in an economic downturn. Regardless of the gloomy macroeconomic outlook, people still need to eat,” Eagles said. “Demand for agricultural commodities tends to be less elastic, less responsive to economic factors, more responsive to population.

“But, tight credit markets and lower agricultural commodity prices could mean farmers will struggle to finance food production to meet growing demand, pushing prices upward.”

Many economists, like Lewis Hagedorn of the Chicago Board of Trade, feel investments in wheat, corn, soybeans and even sugar may be wiser than taking risks with silver, copper, zinc or lead. Agricultural commodities, he points out, stand up better in today’s climate than oil.

“In oil, there is a realization among producers that not only are high prices damaging to global economic growth, but the speed with which high prices were pushing technological innovation to displace oil from the transportation sector was alarmingly rapid,” Hagedorn said. “In agriculture, there is less sensitivity of demand to economic pressures.

“When it comes to grains and oilseeds, we expect to see above-average price levels for corn and soybeans during the coming year. Following a large supply rebound in 2008, the wheat market appears likely to struggle for bullish support.”

No one can argue that gold (roughly $774 per ounce) and platinum (about $840 per ounce) would be wise investments, but many economists, such as world-renowned commodity investment expert Jim Rogers, say commodities are the safe way to go.

“The commodity market offers attractive opportunities, based on their historic price levels, are relatively cheap and below their all-time highs,” Rogers said. “While I do look at base metals like zinc, silver and lead, I will continue to look at agriculture commodities like sugar, coffee and cotton.

“Even if the world economy is going to collapse with everything coming down, I will opt to own wheat and cotton rather than Google or IBM shares.”