The corn-related ETF has been depressed as U.S. corn becomes the cheapest in the world, but international buyers could look to U.S. corn as it is also the only readily available source in the global market.
The Teucrium Corn Fund (CORN) has declined 10.5% over the past year, but things may be turning around for the corn market.
Brazil’s effectively running out of corn until the next harvest while prices in Argentina soaring, Bloomberg reports. Meanwhile, the U.S. is regaining some of its market shares after the world’s biggest corn producer and exporter lost to other suppliers during the trade war uncertainty.
“The U.S. is going to enjoy a two- to three-month window, where they are going to be pretty much the only game in town,” Terry Reilly, senior commodity analyst at Futures International LLC in Chicago, told Bloomberg, referring to the global corn market.
Mexico and Japan have already committed to increased imports and purchased at least 100,000 metric tons of the American yellow grain for four consecutive business days, the longest buying streak of such deals in at least three years, according to U.S. Department of Agriculture data as of Tuesday.
However, corn prices were fluctuating as traders continued to assess the potential fallout from the spreading coronavirus out of China. CBOT corn futures were 0.6% lower to $3.8425 per bushel on Wednesday.
“There is no one on this side of the globe offering corn for less,” John Payne, a senior broker at Daniels Trading, told Bloomberg.
The Teucrium Corn Fund tracks three futures contracts for corn that are traded on the Chicago Board of Trade, including 35% second to expire contracts, 30% third to expire contracts and 35% December following the third to expire. The various contract exposures help the fund limit the negative effects of rolling contracts, especially during a market in contango.
For more information on the commodities market, visit our commodity ETFs category.