Food prices worldwide continue to rise, hitting an 18-month apex recently. Whether this can translate to higher agricultural commodity prices as a whole remains to be seen. But it can provide exposure opportunities for investors with funds like the Teucrium Agricultural Fund (TAGS ).
Consumers continue to get battered by higher food prices, and it’s not just in the United States, but globally.
“World food prices rose in October to an 18-month high as vegetable oils led increases seen in most food staples, United Nations’ data showed on Friday,” Reuters reported. It added that a price index developed by the U.N. Food and Agriculture Organization “increased to 127.4 points last month, up 2% from a revised 124.9 points in September.”
Based on past data, this essentially pegs the index at 5.5% higher compared to a year ago and its highest level since April of last year. Adding to the rise in food prices is harsh weather affecting producers.
“Persisting concerns over the 2024/25 production outlook in Brazil supported a more moderate increase for sugar prices in October when they advanced 2.6%,” Reuters said, also noting that the price of wheat “rose amid concerns over northern hemisphere planting conditions and following the introduction of an unofficial Russian export price floor, while maize was also higher.”
On that note, short-term traders or long-term investors may want to consider ag commodities exposure such as wheat, corn, or sugar. Alternatively, there are also fund solutions that can offer exposure to all three and more.
A Fund-of-Funds for Ag Commodities
As opposed to getting concentrated exposure in a singular commodity, TAGS offers broad-based exposure via a fund-of-funds structure. As such, the fund combines exposure to Teucrium ETFs focused on corn, wheat, soybeans, and sugar.
Traders or long-term investors can focus on TAGS for broad-based exposure or the individual funds for a more focused, concentrated approach in specific commodities. The individual funds featured in TAGS include the following:
- Teucrium Corn Fund (CORN )
- Teucrium Wheat Fund (WEAT )
- Teucrium Soybean Fund (SOYB )
- Teucrium Sugar Fund (CANE )
Summarily, getting ag commodities exposure can provide a portfolio with the diversification it needs to help navigate market uncertainty. That said, TAGS is an ideal complement to a traditional 60/40 stock/bond portfolio with uncorrelated assets exposure in the convenience of one dynamic ETF. For more concentrated exposure in specific commodities, investors can also invest in the individual funds mentioned.
For more news, information, and analysis, visit the Commodities Channel.
