Tuesday, August 3, 2010

Wheat and the Commodity ETF Space

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 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 RJA and DBC have also been lifted significantly by the surge in agricultural futures prices.

In addition to JJG, investors looking for a grain-specific ETF/ETN may also wish to check out 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 (LSC), where 36.8% of the ETN is currently short grains.

For more on related subjects, readers are encouraged to check out:


[source: ETFreplay.com]

Disclosure(s): long JJF and short LSC at time of writing

blog comments powered by Disqus
DISCLAIMER: "VIX®" is a trademark of Chicago Board Options Exchange, Incorporated. Chicago Board Options Exchange, Incorporated is not affiliated with this website or this website's owner's or operators. CBOE assumes no responsibility for the accuracy or completeness or any other aspect of any content posted on this website by its operator or any third party. All content on this site is provided for informational and entertainment purposes only and is not intended as advice to buy or sell any securities. Stocks are difficult to trade; options are even harder. When it comes to VIX derivatives, don't fall into the trap of thinking that just because you can ride a horse, you can ride an alligator. Please do your own homework and accept full responsibility for any investment decisions you make. No content on this site can be used for commercial purposes without the prior written permission of the author. Copyright © 2007-2023 Bill Luby. All rights reserved.
 
Web Analytics