An exchange traded fund pegged to corn prices rose more than 2% Wednesday after the U.S. Department of Agriculture slashed its yield estimate for this year’s crop.
The commodity fund, which invests in corn futures, is up about 24% the past three months and is among the top ETF performers during the period. Trading volume in the corn ETF has been ramping higher in recent weeks.
ETFs indexed to corn, grains and agriculture have soared as the worst drought in years in the Midwest threatens crops. [Corn, Grains ETFs in Huge Breakout on Midwest Drought]
The USDA cut corn yields more than analysts had forecast. It said the crop will average 146 bushels an acre, down 20 bushels from its June estimate, Reuters reported.
“The surprisingly deep cut to the yield outlook shocked traders, who had expected the USDA to take a more conservative approach to adjusting its outlook,” according to the report.
Teucrium Corn Fund