Getting Cozy With the Corn ETF
April 2nd, 2014 at 7:30am by Tom Lydon
Commodities exchange traded products, particularly those tracking agriculture and soft commodities, delivered some impressive first-quarter performances.
By now, many investors know the surge in coffee futures and the iPath Dow Jones-UBS Coffee Total Return Sub-Index ETN (NYSEArca: JO). JO was the best-performing non-leveraged ETF in the first quarter after surging 59.4%. [Coffee Could Rally Again]
Coffee’s run has left some commodities investors looking for the next with some pointing to corn and the Teucrium Corn Fund (NYSEArca: CORN) as a legitimate candidate to rally on par with coffee. CORN did not disappoint in the first quarter, soaring 13.5%. [Calling on Corn]
CORN “broke out from a short-term consolidation on heavy volume on March 31, after a three-week consolidation. Note the drop off in volume during the base of consolidation, which was bullish,” notes Deron Wagner of Morpheus Trading Group.
A more detailed look at CORN’s charts and price action reveals the ETF could be gearing up to add to its first-quarter gains.
“When the price of CORN broke out yesterday, it pushed above the highs of that 4-week range. It’s also quite bullish that yesterday’s volume alone nearly equaled turnover the entire previous week,” according to Wagner. “With such strong volume confirming a clean weekly breakout and trend reversal, bullish momentum is likely to carry $CORN substantially higher over the next several weeks.”
“The USDA also projected that farmers will plant 4% less corn this year than the prior year, choosing instead to plant soybeans, which have commanded higher prices,” according to TheStreet.com.
CORN closed just over $35 on Tuesday and has not closed above $36 since August 2013.
Teucrium Corn Fund
ETF Trends editorial team contributed to this post.
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.