ETFdb Logo
ETFdb Logo
  • ETF Database
  • Channels
    • Active ETF
    • Alternatives
    • Beyond Basic Beta
    • China Insights
    • Climate Insights
    • Commodities
    • Core Strategies
    • Crypto
    • Disruptive Technology
    • Dividend
    • Dual Impact
    • Emerging Markets
    • Energy Infrastructure
    • ESG
    • ETF Building Blocks
    • ETF Education
    • ETF Strategist
    • Fixed Income
    • Free Cash Flow
    • Future ETFs
    • Global Diversification
    • Gold & Silver Investing
    • Innovative ETFs
    • Institutional Income Strategies
    • Leveraged & Inverse
    • Managed Futures
    • Market Insights
    • Megatrends
    • Modern Alpha
    • Multi-Asset
    • Night Effect
    • Portfolio Strategies
    • Retirement Income
    • Richard Bernstein Advisors
    • Tax Efficient Income
    • Thematic Investing
    • Volatility Resource
  • Tools
    • ETF Screener
    • ETF Country Exposure Tool
    • ETF Sector Tracker Tool
    • ETF Database Categories
    • Head-To-Head ETF Comparison Tool
    • ETF Stock Exposure Tool
    • ETF Issuer Fund Flows
    • Indexes
    • Mutual Fund To ETF Converter
    • ETF Data for Journalists
    • ETF Nerds
  • Research
    • First Bitcoin ETF
    • ETF Education
    • Equity Investing
    • Dividend ETFs
    • Leveraged ETFs
    • Inverse ETFs
    • Index Education
    • Index Insights
    • Top ETF Sectors
    • Top ETF Issuers
    • Top ETF Industries
  • Webcasts
  • Themes
    • AI ETFs
    • Blockchain ETFs
    • See all Thematic Investing ETF themes
    • ESG Investing
    • Marijuana ETFs
  • Multimedia
    • ETF 360 Video Series
    • ETF Trends on Videos
    • ETF Trends on Podcasts
    • ETF Prime Podcast
  • Company
    • About Us
    • Swag Store
  • PRO
    • Pro Content
    • Pro Tools
    • Advanced
    • FAQ
    • Pricing
    • Free Sign Up
    • Login
  1. Commodities Channel
  2. Declining Production Could Push This Wheat ETF Higher
Commodities Channel
Share

Declining Production Could Push This Wheat ETF Higher

Ben HernandezNov 29, 2022
2022-11-29

South America can continue to have a profound effect on where wheat prices take investors. In the current state of affairs, decreased supply production in Argentina could propel the prices higher.

As evidenced by the S&P GSCI Wheat Index and the Bloomberg Wheat Subindex, wheat prices could use a boost after peaking in the beginning of the year, particularly during Russia’s invasion of Ukraine. Since then, prices have taken a breather from this geopolitical factor, but they could be heading higher again thanks to the economic forces of supply and demand.

“The latest data from a crop tour organized by the Bahia Blanca Grain Exchange shows that wheat production in the southern Buenos Aires and La Pampa provinces in Argentina is set to decline by 31% YoY following drought and frost conditions,” an ING report said. “The survey estimates for the wheat harvest (which starts next month in the region) is around 3.7mt, compared to 5.3mt last season. Meanwhile, barley production in the region is expected to drop by 20% YoY to 2.3mt.”

Rising wheat prices should benefit exchange traded funds (ETFs) that focus on the commodity, such as the Teucrium Wheat Fund (WEAT C). The fund can be used as an ideal inflation hedge as prices continue to rise alongside rising commodity prices, or investors can use the fund to add commodities to their portfolios for diversification.

Declining Production Could Push This Wheat ETF Higher
^SGSR data by YCharts

Lower Wheat Prices Instead?

Geopolitical factors elsewhere, however, could add a push-pull effect on prices. The current events surrounding Ukraine continue to sway wheat prices, particularly if an export agreement could be reached with Russia and Ukraine.

“Wheat prices are down after Turkish President Recep Tayyip Erdogan said Russia had signaled it was open to extending a deal that safeguards Ukrainian grain exports,” the Wall Street Journal reported.

“Moscow pulled out of the agreement in late October, before saying it would rejoin,” the report explained. “The deal has allowed Ukraine to export millions of tons of grain through Black Sea ports in recent months. It is up for renewal Saturday. Russia’s flip-flop had raised concerns the two sides would fail to agree on terms.”

In any event, if wheat prices feel more selling pressure, this could give prospective investors an area of value to pick up the commodity at lower prices. As mentioned, if not used as an inflation hedging tool, wheat can still give investors the necessary portfolio diversification by adding assets that aren’t correlated to the broad stock market.

For more news, information, and analysis, visit the Commodities Channel.


Content continues below advertisement

Loading Articles...
Help & Info
  • Contact Us
Tools
  • ETF Screener
  • ETF Analyzer
  • Mutual Fund to ETF Converter
  • Head-To-Head ETF Comparison
  • ETF Country Exposure Tool
  • ETF Stock Exposure Tool
  • ETF Performance Visualizer
  • ETF Database Model Portfolios
  • ETF Database Realtime Ratings
  • ETF Database Pro
More Tools
  • ETF Launch Center
  • Financial Advisor & RIA Center
  • ETF Database RSS Feed
Explore ETFs
  • ETF News
  • ETF Picks of the Month
  • ETF Category Reports
  • Premium Articles
  • Alphabetical Listing of ETFs
  • Best ETFs
  • Browse ETFs by ETF Database Category
  • Browse ETFs by Index
  • Browse ETFs by Issuer
  • Compare ETFs
Legal
  • Terms of Use and Privacy Policy
  • © 2023 VettaFi LLC. All rights reserved.
Follow ETF Database
Follow ETF Database

Advertisement

Is Your Portfolio Positioned With Enough Global Exposure?

ETF Education Channel

How to Allocate Commodities in Portfolios

Tom LydonApr 26, 2022
2022-04-26

A long-running debate in asset allocation circles is how much of a portfolio an investor should...

Core Strategies Channel

Why ETFs Experience Limit Up/Down Protections

Karrie GordonMay 13, 2022
2022-05-13

In a digital age where information moves in milliseconds and millions of participants can transact...

}
X