In specific instances, food prices are starting to ease, but the threat of global inflation could tamp down demand.
The push-pull forces of supply and demand will continue to weigh on food prices, while the geopolitical factors in Ukraine will also add an additional element. In the meantime, consumers are looking for ways to circumvent inflation by looking at substitutes amid rampant inflation.
“There are multiple factors affecting the market. First of all, global recession fear is dampening the demand outlook,” said Minwoo Nam, a spokesperson for Tridge, a data and analytics company specializing in the food industry.
“Also because prices went too high, [so] consumers are spending less or looking for substitutes,” Nam added.
2 Funds to Get Agricultural Exposure
Whether it’s for a continued inflation hedge or to simply diversify a portfolio with alternative assets, a pair of exchange traded funds (ETFs) from Teucrium are worth considering for agricultural exposure that’s more targeted than broad-based commodities. When it comes to commodities exposure, most investors may think oil, but agricultural exposure can also provide more commodities diversification.
For investors looking for agriculture exposure who don’t know where to start, this is where Teucrium can fill a void, offering investors an easy solution. Getting exposure to commodities doesn’t mean investors have to hold various positions.
“Our funds are efficiently structured to take out the problems of trading commodity funds,” Gilbertie noted.
Investors can have it all in the convenience of one ETF: the Teucrium Agricultural Fund (TAGS). 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:
- The Teucrium Corn Fund (CORN)
- The Teucrium Wheat Fund (WEAT)
- The Teucrium Soybean Fund (SOYB)
- The Teucrium Sugar Fund (CANE)
Gilbertie also mentioned another fund to consider: the Teucrium Agricultural Strategy No K-1 ETF (TILL), which provides investors with long-only futures price exposure to corn, wheat, soybeans, and sugar. One difference with TILL is that it does not issue a K-1 tax form, but rather a 1099 form.
TILL will hold one futures contract in each of the four markets (corn, wheat, soybeans, and sugar) excluding the front-month (aka spot) contract. TILL is also an actively managed fund, giving investors more dynamic exposure to the markets than does TAGS.
For more news, information, and strategy, visit the Commodities Channel.