Teucrium Trading, LLC, an investment firm based in Brattleboro, Vermont, is taking a swing at offering an exchange traded fund (ETF) that offers a pure play on corn. The timing is fortuitous, since heavy spring rains could slam crops and contribute to rising prices.
The proposed corn ETF will track three separate Chicago Board of Trade corn futures contracts, making it the first to offer investors pure exposure to the grain. Oliver Ludwig for Index Universe reports that The Teucrium Corn Fund (NYSEArca: CORN) will track a daily weighted average of closing settlement prices for the second-to-expire CBOT futures contract, weighted at 35%; the third-to-expire contract, weighted at 30%; and the final 35% based on the contract expiring in the December following the expiration of the third-to-expire contract. [ETFs to Play Agriculture.]
The idea of blending futures is ideal as it will lesson the impact of contango, if any. This is the first shot at a pure play on corn. [Why Ag Prices Could Rise.]
- PowerShares DB Agriculture (NYSEArca: DBA): Holds wheat, corn, soybeans and sugar futures, among others.
More commodity ETFs are on their way to help capture the commodity trend, says Asjylyn Loder for BusinessWeek, as news of Jefferies Group Inc. is planning on rolling out more commodity ETFs, as well. Investors may increase their commodity investments in 2010 to record highs, according to a Barclays Plc survey of 250 institutional investors that was conducted this month. Last year saw $70 billion in commodity inflows.
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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.