The corn market and commodity-related exchange traded fund are moving toward a seasonally strong period as the autumn harvest can provide opportunities.
“Because the autumnal corn harvest is an immutable fact of nature, cyclical price lows are often established during these critical harvest months,” Sal Gilbertie, President and Chief Investment Officer of Teucrium, said in a research note. “Analysis of historical data illustrates that this seasonal corn harvest pattern can potentially provide opportunities for investors.”
The Teucrium Corn Fund (NYSEArca: CORN), the only corn-specific ETF on the market, hit a low at the end of August and somewhat strengthened since then, rising 0.9% over the past month. CORN remains down 9.9% year-to-date.
SEE MORE: Corn ETF Heading Toward a Bear Market
Looking at the long-term seasonal price pattern of spot continuation corn futures prices for the past 20 and 30 years, Gilbertie noted that during the Northern Hemisphere’s corn harvest, which usually occurs at the start of the fourth calendar quarter, there has historically been a seasonal pattern in the first nearby corn futures market where corn prices for delivery representing next year’s harvest have typically bottomed in the last four months of the prior calendar year.
Historical data has revealed that corn has typically bottomed out during the end of the year, potentially setting up investors for a rebound in prices. Gilbertie pointed out that a full 48% of corn’s last 27 seasonal price lows have been set in the last one-third of the calendar year., with December producing the greatest number of price bottoms over the past 27 years.
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The trends reveal “the power of the harvest seasonality and the opportunity it can potentially bring to investors and asset allocators looking to add corn to their investment portfolios,” Gilbertie added.
For more information on the agricultural market, visit our agriculture category.