ETF Trends
ETF Trends

The cost of many goods and services have fallen off in this recession, but food prices may wind up being among the first to rebound. As you watch those prices tick up at the grocery store, you can play any potential increases with exchange traded funds (ETFs), too.

Mitchell Hartmen for Marketplace reports that a steep drop in energy prices and a drop in demand has edged food prices lower over the course of the recession. But if you’ve gotten comfortable, this trend could end as soon as the economy recovers, according to the U.S. Department of Agriculture.

Farmers will be paying more for fertilizer and fuel and it’s predicted that this increased cost will eventually make it onto shelves, taking food prices up 2%-3%. A few commodities that could be impacted include:

  • Soybeans. Tight supply of these beans has the prices of futures edging up already, up 2.2%. Lisa Shumaker for Forbes explains that soybean futures rose 23-3/4 cents to close at $11.14-1/4 a bushel Thursday. The new-crop November contract slipped 1/2 cent to settle at $9.96 a bushel. Strength in the cash market sparked the rally in the nearby soybean contract.

Just a few of your ETF options when it comes to playing the agriculture sector:

  • PowerShares DB Agriculture (DBA): down 1.6% year-to-date; holds sugar, corn, soybean and wheat futures

  • E-TRACS UBS Bloomberg CMCI Food ETN (FUD): up 6.5% year-to-date
  • PowerShares Global Agriculture (PAGG): up 30.5% year-to-date

  • For more stories about agriculture, visit our agriculture category.

    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.