The materials sector was a solid performer, a theme that helped the VanEck Vectors Agribusiness ETF (NYSEArca: MOO) and one that can extend in 2017. The PowerShares DB Agriculture Fund (NYSEArca: DBA) is another avenue for tapping agriculture plays.
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. DBA’s technicals are encouraging.
“DBA smashed through a bearish trendline that had capped it for six months and simultaneously catapulted above its 50-day moving average. To put an exclamation point on the move, Wednesday’s breakout occurred on double the average volume,” according to TheStreet.com.
Last year, MOO was boosted by mergers and acquisitions activity, among other catalysts, including chemicals giant Bayers AG’s all-cash bid for Monsanto Co. (NYSE: MON). MOO tracks global agricultural companies engaged in agri-chemicals, animal health , fertilizers, seeds, traits, farming, irrigation, farm machinery and various agricultural production.
A more focused agribusiness equity play is the Global X Fertilizers/Potash ETF (NYSEArca: SOIL).