Gilbertie noted that as corn goes, so goes the rest to the agricultural industry. Farmers tend to either plant corn or soybeans and corn is used to feed livestock. There is only one chance to produce and if you miss it, then you have to wait for next year’s crop to grow.
“Temperatures will not be as hot as they have been, but still warm enough to keep evaporation rates high and, therefore, crop stress will continue across parts of the region,” Drew Lerner, a meteorologist with World Weather Inc, said in a Reuters report.
“This is a perfect example that people need to look at ags… need to layer them in during pullbacks,” Gilbertie added. “Ags are portfolio stabilizers. People can’t let themselves or animals go hungry.”
He also pointed out that 99% of investors don’t participate in the commodities futures market. Nevertheless, investors can start implementing agriculture ETF and ETN plays in an asset allocation model, like what they are already doing for precious metals, gold and silver.
On Wednesday, corn and other grains were falling hard after the initial pop. This suggests that the agriculture and corn trade may be overcrowded. [Corn ETF Rally Fizzles After Harvest Forecast Cut]
Those seeking exposure to the soft commodities may take a look at some ETF options, including:
- Teucrium Corn Fund (NYSEArca: CORN)
- Teucrium Soybean (NYSEArca: SOYB)
- Teucrium Wheat (NYSEArca: WEAT)
- Teucrium Agricultural Fund (NYSEArca: TAGS)
- PowerShares DB Agriculture Fund (NYSEArca: DBA)
Teucrium Corn Fund
For more information on agriculture sector, visit our agriculture category.
Max Chen contributed to this article.