As geopolitical forces play out on agricultural commodities in Ukraine, fewer domestic exports from the U.S. this summer could also weigh on prices, particularly when it comes to wheat, corn, and soybean exports.
It appears that U.S. exports will face competition from South America, according to data on spring shipments. The three agricultural commodities make up a sizeable portion of exports from the U.S.
A recent Successful Farming article noted that “Competition from South America will crimp U.S. corn and soybean exports over the summer, according to a forecast by the Agriculture Department in its monthly WASDE report. USDA analysts said corn exports would be 3% smaller and soybean exports nearly 1% smaller than estimated a month ago, based on a slowdown in shipments this spring.”
3 Options as Commodities Retreat
Whether or not this has an effect on wheat, corn, and soybean prices this summer remains to be seen. For traders looking to get exposure to any three of these commodities, Teucrium has funds for each. They can also suffice as long-term holds for portfolio diversification.
For wheat, consider the Teucrium Wheat Fund (WEAT). The fund provides investors with an easy way to gain exposure to the price of wheat futures.
Additionally, those looking to trade corn can use the Teucrium Corn Fund (CORN), which tracks three futures contracts for corn that are traded on the Chicago Board of Trade, including 35% second to expire contracts, 30% third to expire contracts, and 35% December following the third to expire. The various contract exposures help the fund limit the negative effects of rolling contracts, especially during a market in contango.
For soybeans, there’s the Teucrium Soybean Fund (SOYB). SOYB can essentially provide similar exposure to what investors could obtain by trading in soybean futures contracts themselves.
This offers short-term traders or longer-term buy-and-hold investors with easy ingress when it comes to soybean price exposure. SOYB provides this level of exposure in a dynamic investment product, as a tactical trading tool or hedge against inflation.
For more news, information, and analysis, visit the Commodities Channel.