Grains Commodity

Grains based ETFs and mutual funds invest the majority of their assets... Grains based ETFs and mutual funds invest the majority of their assets in grains futures contracts. These funds can be focused on one grain or a mix of grains. Common grains that are traded on futures exchanges include wheat, corn, soybeans, soybean meal, and oats. These funds are passively managed, and “roll” the futures contracts they own before they expire. This means they sell a near-dated futures contract and purchase one that will expire at a later date. These funds may be attractive for investors who believe that demand for grains is set to increase, or that production and inventories are set to decline. As with other commodities, grains prices are not simply affected by changes in physical supply and demand. Speculators can play a big role in price movements. In addition, prices are often influenced by factors such as geopolitical tensions, climate changes, and changes in nutritional habits. Another factor that affects grains is switching, where farmers decide to plant more or less of a crop depending on whether another crop is more or less valuable. As a result, these funds are only appropriate for more aggressive investors. Last Updated: 04/19/2024 View more View less

Grains based ETFs and mutual funds invest the majority of their assets in grains futures contracts. These funds can be focused on one grain or a mix of grains. Common grains that are... Grains based ETFs and mutual funds invest the majority of their assets in grains futures contracts. These funds can be focused on one grain or a mix of grains. Common grains that are traded on futures exchanges include wheat, corn, soybeans, soybean meal, and oats. These funds are passively managed, and “roll” the futures contracts they own before they expire. This means they sell a near-dated futures contract and purchase one that will expire at a later date. These funds may be attractive for investors who believe that demand for grains is set to increase, or that production and inventories are set to decline. As with other commodities, grains prices are not simply affected by changes in physical supply and demand. Speculators can play a big role in price movements. In addition, prices are often influenced by factors such as geopolitical tensions, climate changes, and changes in nutritional habits. Another factor that affects grains is switching, where farmers decide to plant more or less of a crop depending on whether another crop is more or less valuable. As a result, these funds are only appropriate for more aggressive investors. Last Updated: 04/19/2024 View more View less