The push/pull factors of agricultural commodities could present investors with a prime buying opportunity. If investors want to diversify their portfolios with assets uncorrelated to traditional assets, the current market environment presents a compelling opportunity.
The release of the United States Department of Agriculture annual acreage report has already been sparking volatility in the ag commodities market. Overall, there was a 3% drop in planted acreage since 2023, which affected corn prices the most upon release.
According to a Tastylive report, soybean prices reacted much better, but are still down overall. Wheat also dropped despite less planted acreage, but could present the most bullishness among the three given that technical analysis reveals it could be coming out of its oversold territory as shown in the relative strength index (RSI).
“The commodity may offer the best case for the lows already being in,” Tastylive reported. The report noted that wheat’s “strong move remains only partially retraced, and the RSI moved out of oversold territory.”
Buy the Dip With TAGS
Any further selling pressure will present an opportunity for investors to buy the proverbial dip in ag commodities. If investors want an all-encompassing option, they can consider the Teucrium Agricultural Fund (TAGS). The fund offers easy ingress to agricultural commodities that can be beneficial to both the long- and short-term investor.
Longer-term investors can diversify their portfolios with assets that are uncorrelated with the broad market. Thus, TAGS offers a perfect complement to a traditional 60/40 stock/bond portfolio in the convenience of one dynamic ETF. The fund combines exposure to Teucrium funds focused on corn, wheat, soybeans, and sugar.
Alternatively, short-term traders can use the fund to play the volatility of ag commodities prices as opposed to holding multiple positions in a variety of ag commodities. TAGS can essentially encapsulate the ag commodities market via one fund.
Furthermore, TAGS presents itself as a compelling option given its low 0.13% expense ratio. That makes it an ideal option for cost-conscious investors in the current macroeconomic environment. The fund is an ideal way for ingress into agricultural investing by combining various Teucrium funds that represent commodities. Furthermore, investors can focus on the fund for broad-based exposure or the individual funds for a more focused, concentrated approach in specific commodities.
The funds featured in TAGS:
For more news, information, and analysis, visit the Commodities Channel.
