The Teucrium Soybean Fund (SOYB) is on the move higher. As agriculture commodities and the corresponding exchange traded products continue gaining momentum, some technical analysts see more upside ahead for SOYB.
SOYB holds a mix of three different soybean futures contracts, including the second-to-expire contract at 30%, the third-to-expire contract weighted at 30%, and the contract expiring in the March following the expiration month of the third-to-expire contract at 35%.
Other avenues for gaining exposure to agriculture commodities include the PowerShares DB Agriculture Fund (DBA) . The PowerShares DB Agriculture Fund tries to reflect the performance of the Diversified Agriculture Index Excess Return, which is comprised of futures contracts on the most liquid and widely tracked agriculture commodities.
The Teucrium Corn Fund (CORN) “provides investors unleveraged direct exposure to corn without the need for a futures account. The Teucrium Corn Fund was also designed to reduce the effects of backwardation and contango,” according to Teucrium.
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“Flooding and heavy rains in Argentina this spring will mean lower outputs from South America this year. Another fundamental factor that could take place this month is possibility that the USDA increases their export projections due to strong foreign demand across the globe,” reports See It Market on soybeans.
SOYB, like other commodities products, is benefiting from the slumping U.S. dollar. However, some believe the PowerShares DB U.S. Dollar Index Bullish Fund (UUP) , which tracks the price movement of the U.S. dollar against a basket of currencies, including the euro, Japanese yen, British pound, Canadian dollar, Swedish krona and Swiss franc, is poised to rebound. That could make commodities ETFs of all varieties vulnerable to some downside.
“For investors with a longer-term time frame (several months to more than a year) a stop loss can be placed under the $8.44 per bushel level (spot price) to contain risk in the event of another correction. Soybeans may return to the $17-$18 per bushel range, but a more realistic target for 2016 is near the 50% retracement at $13.16 (mid-point of 2012 highs and 2015 lows),” according to See It Market.
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Teucrium Soybean Fund