In addition to re-injecting growth into its economy, China is looking to bolster its food security after harsh weather conditions hit key crops like wheat.
The second-largest economy had bright prospects heading into 2023 but still deals with a spate of issues hampering economic growth, such as the after-effects of a real estate development crisis. The government is already implementing policies to help bolster the real estate sector and, subsequently, overall economic growth.
Now, food security may be coming to the forefront as a top-of-mind subject to address, which will once again require intervention by the Chinese government. Among the crops affected by recent weather conditions is wheat, which is down over 20% for the year, but could rise if crop issues persist through the rest of 2023.
As World-Grain.com reported, “China is the world’s leading wheat producer, but poor weather in the spring, as the growing season neared its end, impacted quality and came as a painful reminder of the unpredictability of food production. The Chinese government is moving to ensure food security with a new law designed to ensure self-sufficiency in major agricultural commodities.”
Furthermore, this emphasizes the Teucrium Wheat Fund (WEAT) if bullish traders think wheat can rise in the interim as weather conditions continue to affect supply.
“Reported crop quality issues are expected to underpin China’s demand for imported milling grade supplies, with purchases tentatively pegged at 12 million tonnes, 4.5 million higher month on month but 2 million below the prior year’s record forecast,” a Grain Market Report said, which is published by the International Grains Council (IGC).
Key Commodities in One Fund
Whether as a portfolio diversification tool or for potential profits in short-term price fluctuations, investors or traders looking to get key ag commodities exposure via one fund should consider the Teucrium Agricultural Fund (TAGS) for opportunities. TAGS is essentially a fund of funds featuring a low 0.13% expense ratio.
It combines exposure to Teucrium exchange traded funds (ETFs) focused on corn, wheat, soybeans, and sugar. Traders or long-term investors can focus on TAGS for broad-based exposure or the individual funds for a more focused, concentrated approach in specific commodities.
The funds featured in TAGS:
- The Teucrium Corn Fund (CORN)
- The aforementioned WEAT
- The Teucrium Soybean Fund (SOYB)
- The Teucrium Sugar Fund (CANE)
For more news, information, and analysis, visit the Commodities Channel.