An early rally in corn and grains ETFs collapsed Wednesday after the U.S. Department of Agriculture slashed its yield estimate for this year’s crop.
Teucrium Corn Fund (NYSEArca: CORN) rose 2.2% in early trading to lead all unleveraged ETFs. However, the fund was down 3% in afternoon trading Wednesday in a dramatic reversal.
The move lower in the face of bullish news and sentiment is a warning the corn ETF may need to take a breather following the big recent rally.
The commodity fund, which invests in corn futures, is up about 24% the past three months and is among the top ETF performers during the period. Trading volume in the corn ETF has been ramping higher in recent weeks.
ETFs indexed to corn, grains and agriculture have soared as the worst drought in years in the Midwest threatens crops. [Corn, Grains ETFs in Huge Breakout on Midwest Drought]