Sunday 31 July 2022

Buying some WEAT and CORN

I decided to transfer another A$500 into my Superhero trading account and use the funds to buy some Teucrium WEAT and CORN ETF units. Global food shortages and price increases seem likely given inflation, population growth (still increasing despite there also being a problem with population decline and aging demographics in most developed countries, and even Russia and China), the impact of the Russia-Ukraine war on grain shipments this year, and grain production next year (due to impact on productivity (fertilizer availability and cost) and production (hard to focus on farming in Ukraine during a war)), and climate change impacts.

The Teucrium ETFs seem to be a reasonable way to gain some exposure to grain as a commodity. The Teucrium Wheat Fund (WEAT) provides investors an easy way to gain exposure to the price of wheat futures in a brokerage account, and the Teucrium Corn Fund (CORN) provides investors an easy way to gain exposure to the price of corn futures in a brokerage account.

I had no real reason to invest in both funds rather than invest twice as much in one of the two funds, aside from it being better to diversify than not, as a general rule. I placed the order on Sunday, so I don't think it will be filled until Monday (I'm not sure what the trading hours are for my time zone).

These ETFs have been in an uptrend for the past two years, and had spiked higher at the outbreak of the Ukraine war on 24 Feb, but have since dropped back to the long term trend line, so appear to offer reasonable value at current prices, assuming the long term price appreciation for grains continues.

There seems to be reasonable potential for more upside given previous high prices about a decade ago.

This isn't any sort of recommendation to invest in WEAT or CORN, just an update on a small trade I recently did 'for fun' (to be honest, a $500 investment won't have a noticeable impact on my NW whether it shows massive gains or losses).

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