Higher Seasonal Soybean Demand Might Bolster This ETF

When it comes to specific areas globally, China could see increasing imports as soybean demand ramps up in the latter months of 2022.

“China is increasing imports of soybeans to meet rising demand before a seasonal period of high consumption, Bloomberg reported,” according to a World Grain report.

“Chinese companies have booked at least 40 cargoes from the United States, Brazil, and Argentina, according to people familiar with the transactions,” the report said further. “The purchases will help rebuild stockpiles prior to the Chinese festivals that run from the fall to the Lunar New Year.”

Back in the U.S., this will help keep soybean prices afloat on the futures market. Commodities saw a general rise in the first half of 2022 before falling back down to Earth as of late.

“The buying spree is likely to support soybean futures in Chicago, which have fallen by about US$3 a bushel since hitting a high of over US$17 per bushel in May after Russia’s invasion of Ukraine drove up crop prices,” a Buenos Aires Times article noted.

For investors looking at ways to mute the impact of inflation, commodities may also be beneficial for inflationary periods, according to experts, making them a valuable hedge against the recent surge in the prices of goods and services over the past year.

“A growing number of prominent financial groups believes the era of low inflation is behind us, and that one investment strategy is to boost exposure to commodities and natural resources,” a Forbes article noted.

“Pacific Investment Management Company, or PIMCO, recently joined Capital Group and Union Investment in raising doubts that global central banks will succeed in stabilizing prices long-term,” the article added. “Recent changes in the world economy, including higher labor costs and a retreat from globalization, suggest that increased inflation volatility may be the norm going forward, PIMCO says.”

For a more broad play on commodities, investors can have it all in the convenience of one ETF: the Teucrium Agricultural Fund (TAGS B). The fund combines exposure to corn, wheat, soybeans, and sugar through other Teucrium ETFs that focus specifically on these commodities, essentially offering investors a fund of funds.

Funds featured in TILL:

1. The Teucrium Corn Fund (CORN B)
2. The Teucrium Wheat Fund (WEAT C)
3. The Teucrium Soybean Fund (SOYB B)
4. The Teucrium Sugar Fund (CANE C)

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