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Despite further central bank easing and other stimulus measures that have caused a rally in gold and other commodities, the exchange traded funds for corn (CORN, quote) and soybeans (SOYB, quote), have both fallen in recent action. Could the grain rally be reversing?
Due to the jump in grain prices for CORN (quote) and soybeans (SOYB, quote) from the drought in the Midwest farm belt of the United States, the United Nations Food and Agriculture Organization’s food price index rose 6% in July, the steepest spike in nearly three years.
After the USDA report last Friday, the exchange traded fund for CORN (quote), reached a record high. The exchange traded fund for soy beans (SOYB, quote) also rose. But as predicted here previously, each has fallen since.
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When the U.S. Department of Agriculture releases its most recent corn crop estimate in its World Agricultural Supply and Demand Estimates (WASDE) report, the results are not expected to be pleasing for those who must buy grain crops.
Although there would not seem to be an obvious correlation between natural gas (UNG, quote) and corn (CORN, quote), the record heat in the United States has resulted in one. Both the exchange traded funds for natural gas and corn are up as a result of the heat; both will likely fall once the weather cools.
Brasil Foods SA (BRFS, quote) is an attractive value investment. Emerging market investors can use it to profit from the current rise in the price of corn, caused by the drought in the Midwest farm belt of the United States, which provides 40% of the world’s corn.
The exchange-traded funds for corn, Teucrium Corn (CORN, quote), and soybeans, Tecucrium Soybean (SOYB, quote), are both trading near year highs due to the drought in the Midwest farm belt of the United States. As the United States produces about 40% of the world’s corn, this has driven the price upward to record levels.
