Excessive rainfall in the Great Plains and central Midwest region has helped lift grains related exchange traded funds as traders bet on damage to winter crops and disease-related yield losses.
The Teucrium Corn Fund (NYSEArca: CORN) increased 4.6% over the past week, Teucrium Soybean Fund (NYSEArca: SOYB) gained 3.5% and Teucrium Wheat Fund (NYSEArca: WEAT) rose 2.8%. [Grains ETFs Building Momentum]
“Excessive moisture across the Midwest has raised concerns for disease-related yield losses” for soft, red winter wheat grown in the Midwest, Luke Mathews, a commodity strategist at Commonwealth Bank of Australia (CBA), said, Bloomberg reports.
The northern Great Plains and central Midwest experienced more than double the normal rainfall in the past two weeks.
“Rainy weather is starting to have a material impact on corn-planted area,” Morgan Stanley analysts including Adam Longson said. “Farmers in the northern states are more likely to claim insurance on acres not completed by the end of May, owing to the shorter growing season.”
Moreover, in parts of central Europe, Germany, the Czech Republic and Austria saw flooding after recent storms – Germany is Europe’s second largest wheat grower.