World Food Sub-Index Prices (DBA, RJA, JJA, FUD, UAG, JJG, GRU, CORN, SGG, JJP, COW, UBC)

Sometimes I just don’t know when to leave well enough alone, particularly when it involves that Holy Grailesque quest to cram every potentially relevant piece of data into one overcrowded chart.

Yesterday’s Chart of the Week: World Food Prices is an example of a relatively uncluttered chart that attempts to make one or two simple points in a relatively clear and concise manner. After some back and forth with several readers, I have elected to butcher that simplicity and unveil a chart which adds the five sub-indices: meat; dairy; cereal; oils and sugar. The result, which I have appended below, shows that the real wild card in world food prices has been sugar, which is represented on the chart by the green line. To a lesser extent, cereal, dairy and oil have had their moments of extreme price fluctuations. By far the least volatile of the five sub-groups has been meat.

For those who are looking beyond futures to ETPs which can replicate some of these commodity sub-indices, there are a number of broad-based agricultural ETFs which cover most or all of the sub-indices. The popular PowerShares DB Agriculture Fund (NYSE:DBA) is by far the most liquid of the group. Alternatives to (DBA) include ELEMENTS Rogers Intl Commodity Agri ETN (NYSE:RJA), iPath DJ-UBS Agriculture TR Sub-Idx ETN (NYSE:JJA), UBS E-TRACS CMCI Food TR ETN (NYSE:FUD) and UBS E-TRACS CMCI Agriculture TR ETN (NYSE:UAG). For investors looking to target grains, iPath DJ-UBS Grains TR Sub-Idx ETN (NYSE:JJG) and ELEMENTS MLCX Grains Index TR ETN (NYSE:GRU) are worth investigating, as is the corn-specific ETP, Teucrium Corn (NYSE:CORN). For the sugar sub-index, iPath DJ-UBS Sugar TR Sub-Idx ETN (NYSE:SGG) is an excellent match. iPath DJ-UBS Prec Metals TR Sub-Idx ETN (NYSE:JJP) is an ETP for the ‘softs’ space and is almost equally weighted between coffee, cotton and sugar. Finally, both iPath DJ-UBS Livestock TR Sub-Idx ETN (NYSE:COW) and UBS E-TRACS CMCI Livestock TR ETN (NYSE:UBC) are potential proxies for the meat sub-index.

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[source: United Nations]
Written By Bill Luby From The VIX and More     Disclosure(s): long CORN and SGG at time of writing
Bill is a private investor who also authors the VIX and More ( 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.

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