A bumper crop year across the U.S. agricultural belt will keep soft commodity exchange traded fund prices depressed.
Year-to-date, the Teucrium Corn Fund (NYSEArca: CORN) has declined 14.9% and Teucrium Soybean Fund (NYSEArca: SOYB) fell 4.7%. Meanwhile, the PowerShares DB Agriculture Fund (NYSEArca: DBA), which tracks a group of agricultural commodity futures, including corn 9.4% and soybeans 10.7%, is up 6.7% so far this year. [Navigating an Uneven Market for Commodities ETFs]
Inspections across Ohio to Nebraska show corn output in the U.S., the world’s largest producer, could be 1% above government estimates and soybean output could be 1% higher, Bloomberg reports
The ideal weather conditions helped corn stalks produce more kernels than normal and increased seed pod growth in green soy plants.
The outlook for a bumper crop year has already sent Chicago futures into a bear market last month. CORN is down 26.2% since its April 29 high and SOYB is 17.2% lower from its May 22 high.
CBOT corn futures now trade around $3.72 per bushel and CBOT soybean futures are hovering around $10.43 per bushel.
The government has already predicted record crops and believes exports will drop – Russian counter sanctions against Western countries will diminish overseas demand.