ETF Chart of the Day: Agriculture

tlydon@globaltrend.com (Tom Lydon)
July 12, 2012

Headlines have surfaced in the past several weeks about severe drought conditions across much of the Midwestern United States, which has caused a significant price run up in agricultural commodities.

ETFs rallying on the news include including Teucrium Corn (CORN), Teucrium Soybean (SOYB), Teucrium Sugar (CANE) and Teucrium Wheat (WEAT) for instance.

The largest agricultural based ETF by a mile is PowerShares DB Agriculture (DBA) , which has amassed nearly $2 billion in assets under management since its debut in 2007. In fact, the next closest ETF in the category in terms of assets accumulated is iPath Grains (JJG) , which has attracted $172 million in assets. [Corn, Grains ETFs in Huge Breakout on Midwest Drought]

DBA was developed in order to provide diversified exposure to a number of agricultural commodity products within one index methodology. [Corn ETF Rally Fizzles After Harvest Forecast]

The fund utilizes a rules driven approach and invests in underlying futures contracts of various agricultural commodities.

Currently, top holdings in the fund are Soybeans, Corn, Live Cattle, Sugar, and Cocoa. DBA is currently trading at its highest levels since late 2011, as it has vaulted more than 11% just in the past month alone, and is now positive on the year (+ 1.35%).

PowerShares DB Agriculture

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