ETF Trends
ETF Trends

Among the commodities exchange traded funds recently displaying positive price action, the Teucrium Corn Fund (NYSEArca: CORN), the only corn-specific ETF on the market, is impressing.

CORN jumped 2.2% last week to bring its year-to-date gain to nearly 6.1%. CORN is among the commodities exchange traded products that can deliver for investors if markets readjust toward the idea that the U.S. dollar is due for a near-term pullback and that global economic growth will support increased commodities demand.

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. Those trends could speak to why CORN is surging to start 2017.

Corn futures have been on a steady climb since September 2016 with prices currently trading near 7-month highs as of this writing.  It appears that market participants are focusing on current strong U.S. Corn exports and solid demand from ethanol producers as fundamental factors for being long the market. However, we are quite aware that we are in a global market for grains and attention will need to be paid to South America, where it appears that a bumper Corn crop will be harvested out of Brazil with official estimates calling for production to total a record 87.4 million metric tons this season,” according to Options Express.

For investors looking for broad-based, diversified exposure to agriculture and soft commodities, the PowerShares DB Agriculture Fund (NYSEArca: DBA) is a solid choice.

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.

Looking at the daily chart for March Corn futures, we notice prices have recently moved above both the 20 and 200-day moving average (MA) for the first time since June of last year. We are also starting to see the 20-day MA preparing to potentially cross above the longer-term 200-day MA which is generally seen as a bullish technical indicator,” adds Options Express.

For more news and strategy on the Agriculture market, visit our Agriculture category.