The ETF Play For Rising Corn Prices
Corn prices may be set to soar higher and they did just that last week after Goldman Sachs issued a reporting saying corn would rise 29% to $4.75 a bushel in a year.
Global reserves as a percent of consumption are forecast to fall to 17.4$ by Oct. 1, below the 30-year average of 27.7% even after last year’s record crops, Bloomberg News reported, citing goverment data.
Acreage planted this year is expected to be the highest since World War II, but even that may not derail corn prices and the way to play bullish trends in corn futures is with the PowerShares DB Agriculture ETF (NYSE: DBA).
There is no corn-specific ETF or ETN available to U.S. investors, but DBA allocates 12.5% of its weight to corn according dbfunds.com, the Web site of DBA's issuer. That ties corn with soybeans for DBA's top spot.
As is the case with all commodities, corn prices are tied to strength or weakness in the U.S. dollar and that is something investors should consider, but if you're bullish on corn, DBA may be your best bet.
The outlook is similarly bullish for soybeans and that makes DBA all the more alluring.
