5 Agricultural ETFs Upgraded To Buys

So far, the year 2016 has been moderate for agricultural commodities with some specific grains like sugar, soybean and coffee seeing a spike in prices while most other still reeling under pressure as evident by the 1.5% year-to-date decline (as of November 25, 2016) in the broader soft commodity ETF PowerShares DB Agriculture ETF (DBA - Free Report). Even a subdued greenback could not turn the tide for all soft commodity exchange-traded products.

While the likelihood of a stronger U.S. dollar in the wake of a Fed rate hike bet can spoil the party for agricultural commodities going forward, cheaper valuation and some grain-specific factors may provide support to a few agricultural ETF/ETN investing. As per analysts, the current bear markets for commodities like wheat and corn may worsen, but “previous bears have rarely lasted this long or fallen this hard.”

As per an article published on Financial Times, some analysts believe that index funds, or those that track commodities indices, will likely be long on agricultural commodities in the second half of 2017 to hedge against inflation. And this is especially true given the rising inflation expectations in the U.S. after Trump’s win.Investors should also note that volatility in grain markets have been at subdued levels for quite some time now.

In this light, below we highlight five agricultural exchange-traded products that were lately upgraded to Zacks Rank #1 (Strong Buy) or #2 (Buy) as per the Zacks methodology.

Teucrium Corn ETF (CORN - Free Report) – #5 (Strong Sell) to #1

Though this year corn prices have seen dire trading, with CORN losing over 9% in the year-to-date frame (as of November 23, 2016), prices may jump soon. As per barrons.com, supply is approaching the peak with demand still growing.

With prices at nadir, it is less likely that farmers will beef up production. Global production was 1.03 billion metric tons in the present growing season, up from 716 million tons a decade ago, going by the data offered by the U.S. Department of Agriculture.

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