How To Trade Agricultural Commodities Without Trading Futures


Have you ever thought about trading or investing in an agricultural commodity, possibly as an inflation hedge, such as wheat, corn, soybeans, or even coffee? But maybe you didn’t want to get into futures because of the risk or lack of understanding or both. Well, there is another way to trade these food items, and that is through the agricultural commodities exchange traded funds.

Probably the safest way is through an ETF that has a diversified portfolio of agricultural products, such as the Invesco DB Agriculture Fund (DBA), which has an investment objective of investing in a portfolio of exchange-traded agricultural futures. If you think the price of corn is going to take off, you could trade the Teucrium Corn Fund (CORN).

Or maybe you think the demand for sugar is going to increase, causing the sugar price to spike. You have a couple of alternatives, like the iPath Series B Bloomberg Sugar Subindex Total Return ETN (SGG) and the Teucrium Sugar Fund (CANE). If you like chocolate, there is the iPath Bloomberg Cocoa Subindex Total Return ETN (NIB).

The following is a list of the agricultural commodities ETFs.

Commodity Symbol ETF Name  Total Assets*
Agriculture DBA Invesco DB Agriculture Fund  1,018,170
Agriculture RJA Elements Rogers International Commodity Index-Agriculture Total Return ETN  153,758
Corn CORN Teucrium Corn Fund  120,848
Coffee JO iPath Series B Bloomberg Coffee Subindex Total Return ETN  94,895
Wheat WEAT Teucrium Wheat Fund  75,645
Soybean SOYB Teucrium Soybean Fund  44,971
Sugar SGG iPath Series B Bloomberg Sugar Subindex Total Return ETN  26,419
Sugar CANE Teucrium Sugar Fund  22,844
Cocoa NIB iPath Bloomberg Cocoa Subindex Total Return ETN  22,713
Grains JJG iPath Series B Bloomberg Grains Subindex Total Return ETN  21,563
Cotton BAL iPath Series B Bloomberg Cotton Subindex Total Return ETN  20,602
Livestock COW iPath Series B Bloomberg Livestock Subindex Total Return ETN  19,665
Agriculture TAGS Teucrium Agricultural Fund  14,180
Agriculture JJATF iPath Series B Bloomberg Agriculture Subindex Total Return ETN  11,211
    * In thousands  

You will notice that some of these are ETNs (Exchange Traded Notes) as opposed to ETFs. ETNs are senior, unsecured debt securities similar to a bond Keep in mind that these funds are very volatile, very speculative, and can have low volume and very wide spreads.

Disclosure: Author is long JO and WEAT.

Disclaimer: This article is designed to provide information. It is provided with the understanding that neither the author nor the ...

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