As the Russian invasion of Ukraine looms on, commodity prices have seen a spike. That’s because some commodities are caught in the middle of the conflict.
For example, Russia claims the top spot in the world for wheat exports. Ukraine is also actively engaged in exporting both wheat and corn. As a result, a delay or suspension in commodity shipments from either country could drive prices and inflation even higher. Furthermore, sanctions placed on Russia may limit its exports. CFRA analyst Arun Sundaram explains the following:
“The US is not a key trading partner with Russia/Ukraine but is nonetheless likely to feel the shock from other major countries that do rely on Russia/Ukraine.”
With this in mind, investors may be wondering what the commodity price spikes mean for the market. Today, we are seeing one impact, with commodity exchange-traded funds (ETFs) in the spotlight. Here are four such commodity ETFs to watch.
Commodity ETFs to Watch: CORN, DBA, SOYB, WEAT ETFs
- For starters, the Teucrium Corn Fund (NYSEARCA:CORN) has appreciated 15%-plus over the past month. This price action is justified; Ukraine is estimated to supply 16% of global corn exports every year. With the country under attack, it wouldn’t be surprising to see delays in its corn exports. Additionally, the price for corn has increased by more than 25% since the start of the year.
- The Invesco DB Agriculture Fund (NYSEARCA:DBA) is made up of a variety of agricultural commodity names. These include exposure to corn, soybeans, coffee and sugar. The DBA ETF may be one such fund to watch for investors who expect to see a general rise in commodity prices.
- Since November, the price of a bushel of soybeans has risen by more than 35%. Furthermore, Russia was recognized as the eighth-largest exporter of soybeans in 2020. It was also the eighth-largest producer of soybeans in 2020. With the country in conflict, its exports of soybeans may dry up, which could increase the price. The Teucrium Soybean Fund (NYSEARCA:SOYB) may be another ETF to watch for anyone expecting further price increases.
- Finally, combined, Russia and Ukraine produce 29% of all global wheat exports, with Russia producing roughly 20%. With both countries focused on the conflict, their wheat exports may fall. The Teucrium Wheat Fund (NYSEARCA:WEAT) has increased by a staggering 50%-plus in the past month.
On the date of publication, Eddie Pan did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
