Wheat and The Commodity ETF Space (JJG, RJA, DBC, GRU, LSC)
Anyone with even a passing interest in commodities has no doubt taken notice that the worst drought in Russia in at least 50 years, coupled with climatological excesses around the globe which have created a substantial disruption in the supply of agricultural commodities, most notably in wheat.
The graphic below from ETFreplay.com summarizes some of the impact on selected commodity ETFs and ETNs over the course of the past week. Note that (NYSE:JJG), the iPath Dow Jones-UBS Grains Total Return Sub-Index ETN, is up 9% in the past week and broader commodity and agricultural ETFs such as (NYSE:RJA) and (NYSE:DBC) have also been lifted significantly by the surge in agricultural futures prices.
In addition to (NYSE:JJG), investors looking for a grain-specific ETF/ETN may also wish to check out (NYSE:GRU), the ELEMENTS MLCX Grains Index Total Return ETN. As noted last Friday, investors can also take a long position in grains by shorting the ELEMENTS S&P Commodity Trends Indicator ETN (NYSE:LSC), where 36.8% of the ETN is currently short grains.
For more on related subjects, readers are encouraged to check out:
- LSC Long-Short Commodities ETF Struggling Mightily
- Chart of the Week: Impact of Falling Euro on Stocks and Commodities
- Chart of the Week: Commodities and the Dollar
- Chart of the Week: Breaking Out Recent Commodities Moves
- CME to Use VIX Methodology for New Crude Oil, Corn, Soybean and Gold Volatility Indices
Bill is a private investor who also authors the VIX and More (http://vixandmore.blogspot.com/) blog and an investment newsletter from just north of San Francisco. His research and trading interests focus on volatility, market sentiment, technical analysis, and ETFs. Prior to becoming a full-time investor, Bill was a business strategy consultant for two decades and advised clients across a broad range of industries on issues such as strategy formulation, strategy implementation, and metrics. When not trading or blogging, he can often be found running, hiking, and kayaking in Northern California. Bill has a BA from Stanford University and an MBA from Carnegie-Mellon University.