Grab Your Share Of The Commodity Rice In This ETF
“Gold has been grabbing all the headlines lately as the price for the precious metal has hit record highs. In the weeks and months to come, however, you’re going to be hearing about a far more pedestrian commodity: Rice. The price of rice has started to climb based on reports that both India and the Philippines are looking to import record quantities. India lost 18% of its rice crop to drought this year. For the first time in more than 20 years, it may have to become a net importer of rice,” Amy Calistri Reports From Street Authority.
“While drought plagued India, the Philippines had the opposite problem: Too much rain. The country lost an estimated 1.3 million metric tons of rice — at least 8% of the domestic supply for this rice-importing nation — in a series of strong typhoons that hit the region during the past three months. Along with most commodities, rice hit record prices last year, with the futures markets hitting a peak of $25.07 per 100 pounds in April. And, also like most commodities, the price of rice tumbled as the global recession unfolded. But even though the price of almost every other commodity has been rebounding, boosted by a weaker U.S. dollar, the price of rice has been flat-lining at $13.50,” Calistri Reports.
“Unless you dabble in the futures market, there’s no real pure rice play for American investors. When rice hit record prices last year, investors wondered why there was no rice-based exchange-traded fund (ETF). More than a year later, they are still wondering why one of the world’s largest crops still lacks an investment vehicle of its own. Some investors are using general agriculture ETFs like PowerShares DB Agriculture (NYSE: DBA) and iPath DJ-AIG Agriculture Sub-Index (NYSE: JJA) as proxies for rice. But neither of these funds has an interest in rice. Elements/Rogers International Commodity Agriculture (NYSE: RJA) is one of the only funds that does have rice as a holding, but only a meager 1.43% of the portfolio. Still, it’s more rice than you’ll find in any other exchange-traded product,” Calistri Reports.
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Here is a look at the the 3 agriculture ETF’s below:
The investment (DBA) seeks to track the price and yield performance, before fees and expenses, of the Deutsche Bank Liquid Commodity Index – Optimum Yield Agriculture Excess Return. The index is a rules-based index composed of futures contracts on some of the most liquid and widely traded agricultural commodities â corn, wheat, soy beans and sugar. The index is intended to reflect the performance of the agricultural sector.
The investment (JJA) seeks results that correspond generally to the price and yield performance, before fees and expenses, of the Dow Jones-AIG Agriculture Total Return Sub-Index. The fund is designed to reflect the performance of agricultural commodities. The index is composed of seven futures contracts, soybeans, corn, wheat, cotton, soybean oil, coffee and sugar.
The investment (RJA) seeks to replicate, net of expenses, the Rogers International Commodity Index â Agriculture Total Return index. The index represents the value of a basket of 20 agricultural commodity futures contracts.