What is our trading focus?
CBOT Soybeans - SOYBEANSNOV20
CBOT Corn - CORNDEC20
CBOT Wheat - WHEATDEC20
AIGG:xlon - WisdomTree Grains ETX (UCITS eligible)
The grain market rally which during the current quarter has lifted the Bloomberg Grains Subindex by 10% is showing signs of consolidation. Soybeans which reached the highest level since April 2018 on Monday has together with both corn and wheat been drifting lower as the stronger dollar reduces the competitiveness off US farm products on the global export market.
Since July a record amount of soybeans and corn has been sold to China after the country’s own production was reduced by month of torrential rain. Adding to this a deteriorating yield outlook for U.S. crops after adverse August weather and the outlook for further gains look promising over the coming months.
The WisdomTree Gains ETC (Ticker: AIGG:xlon and UCITS eligible) is designed to track the Bloomberg Grains Subindex Total Return. An elevated contango due to excess production has seen the index trade within a downtrend since 2012. As per the chart, the recent rally has triggered a breakout with the next level of interest to confirm it being $3, the January high.