I know about contango but I still cannot understand why DBA is stagnant while all grain and most commodity prices are going up each day. Why isn't DBA following the Wheat and other grain prices? Is there really something wrong with DBA? If you really understand the composition of this ETF please explain it to the rest of us. Yes, there may be the 100 year bull market but will DBA be the right place to be to capture the winnings??
Ditto - I bought DBA three months ago in anticipation of rising Ag prices.
I'm on the right side of the trade, but DBA just sits there while half of Russias wheat crop goes up in flames.
What is the matter with DBA???
The CFTC has taken a hard line toward funds that hold physical commodities like DBA. Last year DBA was forced to dump large quantities of corn and wheat due to a belief that the accumulation of long positions in these markets was warping them. This is similar to UNG being forced to sell natural gas contracts--UNG is doomed.
I own DBA and am not happy. As time goes by it appears that a bunch of these commodity ETFs and ETNs are really flawed. I've given up on the precious metals ETFs and own the physical metal--its much better. Next stop: sell DBA and buy a farm.
The DBA website makes a pretty good case that the fund
tracks its index. If there is a rat, he hasn't hurt us much.
Unfortunately, over the past year the index hasn't done squat,
and DBA charges us 0.85% to follow it.
DBA calls have done very nicely---some of the Aug & Sept call strikes are up more than 1000%--ten fold or more. DBA is moving just as I expected--didn't quite hit $30--but a nice move.
But here is the most important point--the grain rally has miles to go. The Russian/Ukrianian/eastern European harvest will be much worse than even now discussed, and Australia is having problems as well (drought in the west and some locusts). The Canadian harvest may be impeeded because of wet conditions in some areas and drought in others. Parts of South America have been dry as well. The Indian monsoons have been normal or excessively wet in some areas, but well below normal in other areas. I expect to see DBA into the mid $30s before summer ends, and if anything happens to imperil the US harvests (eg extreme heat or drought in the southern plains, or excessive moisture in the eastern corn belt from tropical depressions coming up from the Gulf) then we could see a repeat or surpassing of the 2008 highs in the $40s.
DBA call options are still cheap--and unlike futures--your risk is limited to the price of the calls. I would suggest Sept. $27, $28 and Oct. $28, $29, $30. No guarentees, but they look like good bets. Do your own due dilegence.