As the popularity of commodity ETFs continues to surge, it's been an eventful summer for funds offering exposure to agricultural resources. As the tremendous popularity of commodities as an asset class has spurred an expansion of ETF options, investors now have the opportunity to invest in a wide assortment of single commodity funds targeting all types of natural resources. This year saw the introduction of one ETF that many had been long awaiting; a corn fund. With grain markets around the world in focus thanks to massive shortages and droughts in major wheat producer Russia, agricultural commodities have been all the buzz in the investing world as prices have continued to surge higher.
Today, the U.S.D.A. will release its monthly crop report, a highly anticipated document that will include the government's updated projections for this year's corn harvest. This time, the outcome is far from certain; experts are predicting results all across the board. The popular estimate sees corn production for August at 13.199 billion bushels, but the predictions range anywhere from 12.880 to 13.410 billion bushels. In July, the prediction stood at a robust 13.365 b. b., but analysis of early crop yields from the Midwest has led many to believe that the number will be revised downward. That has prompted speculators to rush into corn markets, sending the crop on a tear higher in recent weeks [see also The Perfect Storm For The Corn ETF?].
If the official estimate comes in even lower than expected, corn prices should get a boost, as that would reveal the government's concern about a reduced harvest. If the estimated production level holds steady, corn prices could fall, and some believe that a bubble in the staple crop could begin to pop [see also Can Chinese Demand Boost The Corn ETF?].
With the U.S.D.A.'s report on tap, the Teucrium Corn Fund
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Disclosure: Photo courtesy of Bill Whittaker. No positions at time of writing.
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