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A price drop could mean value for this agriculture ETF

The party of lower food prices may be short-lived. Data from the Food and Agriculture Organization of the United Nations (FAO) revealed that food prices fell in July, but the firm sees this respite as only temporary.

FAO Food prices fell by 8.6% in July, the data showed. This is a significant increase compared to the 2.3% decline in June.

“Many uncertainties remain, including future production prospects and higher fertilizer prices affecting farmers’ livelihoods, a bleak global economic outlook and currency movements, all of which pose serious pressures on global food security.” FAO Chief Economist Maximo Torero said.

Similarly, investors can perceive a value play with exchange traded funds (ETFs). Teucrium Agricultural Strategy No K-1 ETF (until ). The fund is seeing strong inflows, including nearly $65 million coming into the fund on Monday, August 8.

As of the end of August 5, the fund already had inflows of $4.66 million bringing total assets to nearly $70 million. Traders may forecast another run-up in food prices, confirming a more inflationary upward trend.

until Provides investors with long-term futures price exposure for corn, wheat, soybeans and sugar. A defining feature until It does not issue a K-1 tax form, but rather a 1099 form, allowing investors to be taxed directly as individuals.

until Each of the four markets (corn, wheat, soybeans and sugar) has a futures contract, except for the forward month (aka spot) contract. until Being an actively managed fund, it gives investors a more dynamic exposure to the markets.

“Today’s flows confirm our thesis that investors are looking to allocate to agriculture and some prefer to hold funds that do not issue K-1s,” Jake Hanley, managing director and senior portfolio strategist at Techrium, said in an email. “The timing suggests that investors are looking to take advantage of the recent pullback in farm prices.”

With n untilInvestors can opt for a passive approach to get all-in-one exposure to agriculture using this Teucrium Agriculture Fund (tags B). Featuring a low 0.13% expense ratio, the fund combines exposure to corn, wheat, soybeans and sugar with other tukrium ETFs that focus specifically on these commodities, essentially offering investors a fund of funds.

Funds are featured until:

  1. * Teucrium Corn Fund (Corn B)*
  2. The Teucrium Wheat Fund (WEAT C)
  3. The Teucrium Soybean Fund (SOYB B)
  4. The Teucrium Sugar Fund (cane C)

For more news, information and strategy, visit Commodity Channel.

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