Corn is it time to go long not quite – teucrium corn etf (nysearca corn) seeking alpha usd to malawi kwacha


Since reaching an all-time high of $52.69 in August 2012, the Teucrium Corn ETF (NYSEARCA: CORN) is down nearly 66% to a recent price of $17.99 per share usa to india exchange rate. During that same month the author posited in an article entitled, " Are Unyielding Corn Prices Zapping U.S. Exports?" that persistently high prices were negatively impacting export sales.

The supply demand fundamentals of the corn market and their impact on the corresponding futures market affect’s this ETF’s value. Let’s examine these fundamentals british pound exchange rate history. Corn Supply & Demand Production, Use & Beginning Ending Stocks

The first field surveys of this year’s crop estimate lower feed use and ending stocks, mostly due to lower production. The yield forecast for the 2017/18 marketing year, which begins September 1, is 169.5 bushels per acre.

This is 5 bushels per acre below the previous year convert usd to pounds. However, this year’s yield estimate is slightly higher than the five-year average.

Grain consuming animal units for 2017/18 projected higher by 800K vs. last month led by higher cattle placements. Month over month supplies of pork, poultry, and eggs unchanged.

Projected 2017/18 marketing year beginning stocks of 60.2MMT are highest since 1988/89 stock market definitions glossary. Projected total supplies of nearly 421 million metric tons are the second highest total on record with the current marketing year being the highest. Price

The projected farm price is $3.30 per bushel, unchanged from last month and a nickel lower than the current marketing year nzd usd investing. The average cash price across the USDA’s twelve select terminals as of August 18 was $3.41 per bushel. Export Sales

The current marketing year began with US export estimates of 55.25MMT bloomberg pre market futures. As the marketing year progressed the USDA reduced export sales estimates by 8.25MMT eur usd grafico. While year-to-date US export sales are essentially flat year-over-year, initial estimates were clearly overly optimistic.

Argentina, Brazil, and Ukraine have increased corn exports by 4.5MMT, 9.5MMT, and 4.5MMT over the USDA’s September 2016 projections, respectively. A weakening peso has continued to give Argentina a price advantage in the global export market during the last two months of the marketing year while the Brazilian real has strengthened relative to major importing countries.

While the US is easily the largest producer of corn in the world, the country exports only a small percentage of the grain binary translator to text. Livestock feed followed by ethanol production make up the greatest uses of US corn production. China is the second largest producer but uses almost all its corn production domestically.

Chinese imports are minimal at roughly 3 million metric tons per year over the last 3 years. With a projected stock to use ratio of just under 44% for the current 2016/17 marketing year, the country has an adequate cushion to withstand any supply shock in a given growing season silver price chart 5 year. Futures & the ETF

Since August 2012, corn futures have dropped nearly 59%, which is a little less than the Teucrium Corn ETF over the same period. Over the last sixty months, the positively skewed return distribution of the ETF has a mean average monthly return of -1.5% while the median monthly return is -1.2%.

However, during the last 12 months the mean average monthly return improved marginally to -0.56%. Currently the corn ETF holds future contracts for December 2017, March 2018, and December 2018. The next futures contract rollover will begin on September 12 2017 with the May 2018 replacing the December 2017 contract. Is It Time To Go Long?

In my opinion, while price competition for animal feed with soybean meal provides some support for corn prices, eventually burgeoning soybean supplies will cause soybean prices to revert to its long-run average price. Once this happens, corn prices should experience another, smaller correction. This correction should begin to resolve the supply situation gender quotes. In addition, while the mean average monthly return is improving, it remains negative.

Finally, with a 60-month correlation to equities of only 0.03, the Teucrium Corn ETF certainly provides a diversification benefit, however, that benefit may not offer a positive return on investment at this time.

I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.