He took on corn first because of its enormous size. “It’s in everything – in 25% of the items at the grocery store.”
The primary use is as feed for animals, which ties in once again to population growth and the whole demand picture: as more people become prosperous, they’ll eat a protein diet. [Why Investors Like Agriculture ETFs.]
Before bringing CORN to market, Gilbertie looked at all the issues and debates about contango and designed the ETF to address those concerns. CORN never holds spot. “We intentionally designed the benchmark to be multiple futures contracts, not just concentrated in one.”
In order to further mitigate the effects of contango, the contracts are spread throughout the crop year by holding the second and the third month, then the December after the third month.
Teucrium has five more ETFs waiting in the wings for regulatory approval: oil, natural gas, sugar, soybeans and wheat. [Agriculture ETFs: Withering Crops, Growing Prices.]
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