The PowerShares DB Agriculture Fund (NYSEArca: DBA) is up a mere 1% this year, a slack performance compared to some other commodities exchange traded products, but agriculture commodities could finally be ready to contribute to the commodities rally.
The PowerShares DB Agriculture Fund tries to reflect the performance of the Diversified Agriculture Index Excess Return, which is comprised of futures contracts on the most liquid and widely tracked agriculture commodities.
The PowerShares DB Commodity Index Tracking Fund (NYSEArca: DBC), which holds a basket of various commodities, is also in the red, but that fund has heavy energy exposure, levering it to oil prices. DBA lacks that catalyst and is dependent on positive price action in ags and softs, areas of the commodities complex that have languished this year.
DBA currently features exposure to eights commodities, including cattle, coffee, corn, soybeans and wheat.
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“Money managers more than doubled their wagers on a rally for agriculture prices, pushing their holdings to the biggest since July, after betting on declines just last month. The investors are now the most bullish on soybeans since May 2014 and trimmed the bets on declines for corn for the fifth time in six weeks. The Bloomberg Agriculture Subindex of eight farm products is heading for its best April rally since 2010,” reports Lydia Mulvany for Bloomberg.
The Teucrium Soybean Fund (NYSEArca: SOYB) has recently been soaring as well. SOYB holds a mix of three different soybean futures contracts, including the second-to-expire contract at 30%, the third-to-expire contract weighted at 30%, and the contract expiring in the March following the expiration month of the third-to-expire contract at 35%.