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"Biofuels won't solve the world's energy problems and will never substitute for crude oil," cautions Elliott Gue, editor of The Energy Strategist. "However, generous subsidies will power rapid growth in this industry."

He explains, "The U.S. government has mandated that the U.S. produce 12 billion gallons of ethanol by 2012, up from around 5.4 billion gallons in 2006. But many on both sides of the aisle in Congress want to extend that mandate to a whopping 35 billion gallons by 2017.

"To put that into perspective, there currently isn't enough corn grown in the U.S. to produce 35 billion gallons of corn-derived fuels even if we divert every last kernel to biofuels production.

"In addition, the European Union has aggressive mandates for biofuels production. Even in fast-growing Asia, there's plenty of growth to be found. The U.S. government offers generous funding and subsidies for biofuels production.

"Our recommend play in the biofuels sector is Monsanto (NYSE: MON), whose main business is the production of genetically modified (GM) seeds. GM seeds are designed to exhibit certain traits; examples might include drought, weed, and pest resistance.

"Monsanto also makes Roundup, a popular herbicide used to control weeds. The company is also able to engineer multiple GM traits into seeds, including resistance to drought conditions. The result is better yields per acre.

"Monsanto recently reported results slightly under expectations for the quarter and gave a slightly weaker-than-forecast outlook for 2008.

"Some news outlets have made a big deal about the company's quarterly loss, but that's ludicrous; analysts were expecting a loss of 17 cents per share for the quarter against the reported 18-cent loss. This is a totally normal seasonal pattern for Monsanto.

"Longer term, I see nothing to change my bullish case for the stock. In the next two years, there's plenty of room for the stock to grow as it brings new generations of genetically modified corn and soybeans to market. Any weakness in the stock should be viewed as an opportunity to buy."

Each day, Steven Halpern's TheStockAdvisors.com features the latest investment commentary and favorite stocks of the nation's leading financial newsletter advisors.