Corn futures have already hit record high prices because of US weather problems.
Speculators might purchase corn futures, or the Teucrium Corn Fund (CORN), during a dry season expecting prices to rise on a thin harvest.
Corn futures prices on the Chicago exchange have risen about 50 percent since mid-June, hitting all-time record levels last month, and other grains such as wheat and soybeans are also sharply higher.
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But everything from foreign currencies (the Canadian, Australian and New Zealand dollars all test record highs) to precious metals (setting new records almost daily) and crop futures (corn and wheat have nearly doubled this year).
Right now, for example, farmers are harvesting crops like corn, and they use futures to market those crops.
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However, industry sources believe exposure the ETN was holding to corn, wheat, soybeans and sugar futures was nearing limits that might attract the attention of regulators at the Commodity Futures Trading Commission.
It is designed to imitate the futures market in commodities such as corn, wheat and steel.
Commodity futures, particularly in the areas of corn, soybeans, cotton, are pointing to still higher prices ahead.
We have the futures markets: the future price of corn and soy and wheat has gone up.
These exchanged funds (ETFs) purchase a variety of agricultural commodity futures, and increases in the price of wheat, corn, cattle, and other food prices will benefit shareholders of these securities.
The note consists of futures of contracts of seven agricultural commodities (soybeans, corn, wheat, cotton, soybean oil, coffee and sugar) and tracks the return of the Dow Jones-UBS Agriculture Total Return Sub-Index.
If a farmer wants to protect from falling corn and soybean prices, it can lock in the price in the futures market, also a hedging strategy.
To diffuse this risk Partridge assembles a broad mix that includes foreign and domestic stock indexes, credit-default swaps and futures on commodities like crude oil, cattle, hogs and corn.
For fund investors, good bets are the Market Vectors Agribusiness ETF (MOO), whose top holdings include ag biotech giants Monsanto and Syngenta and tractormaker Deere, and the Invesco Powershares Agricultural ETF (DBA), which invests in a range of commodities futures, from Kansas wheat to feeder cattle to soybeans, cocoa and corn.
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The note, which was created in March 2008, is similar to the iPath DJ-UBS note in that it takes long positions in agricultural futures, tracks the UBS Bloomberg CMCI Food Index and is heavily weighted towards sugar, soybeans and corn.
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