Teucrium Agricultural Fund

TAGS

Market cap $7.85M

Trade truce hopes lift agricultural ETFs like SOYB, CORN, and TAGS, signaling a potential rebound for the U.S. farm sector.

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.

China continues to wrestle with its economy, adding stimulus measures to stave off the aftereffects of a real estate crisis a few years ago. But as a major corn and soybean consumer, it's keeping prices in limbo.

Per a Finimize report, global food prices climbed higher during the month of September to reach the highest level in the past year and a half according to the United Nations Food and Agricultural Organization (FAO). Sugar prices led the pack, opening up opportunities to invest in rising prices or agricultural commodities in general.

Investors have been cheering China's latest efforts to shore up its economy with recent stimulus measures. In turn, this could provide a much-needed spark for agricultural commodities.

This time of year, according to seasonal trends, is known for the September Effect — a challenging month for equity performance — and the return of market volatility.

China has long been pursuing a state of independence, relying less on the global market for a variety resources. That independence is spilling over into agricultural commodities, which could sway the market.

As capital markets brace themselves for rate cuts, more volatility could be ahead as renewed recession fears are spooking investors in traditional asset classes. That said, it could be an opportune time to add agricultural commodities to portfolios.

While agricultural commodities have been trending lower as of late, they can still offer investors diversification benefits. Teucrium has a pair of funds that offer passive as well as active exposure to ag commodities.

Downward price pressure continues to mount on agricultural commodities in the short term, but the long-term analysis could portend to growth. Agricultural commodities like corn and soybeans continue to skew toward the downside.