Commodities

Teucrim’s CIO Sal Gilbertie Gives Current State of Commodities

Commodities have been on a proverbial roller coaster ride with Russia’s invasion of Ukraine, rising global inflation, and now recession fears in the first half of 2022. Sal Gilbertie, president and chief investment officer at Teucrium Trading, gave investors his take on the current state of commodities while visiting the Animal Spirits Podcast.

It’s difficult to talk about the rise in commodity prices without mentioning the geopolitical wild card that helped boost commodities for the first half of 2022. Gilbertie offered his views on the invasion, which has caused a stranglehold on certain commodities leaving Ukraine due to Russia occupying the Black Sea and blocking exports.

With respect to what has surprised Gilbertie the most, he circled back to producers having to amp up production. In turn, this caused the current drop in prices where the forces of supply and demand are playing out.

The Bloomberg Commodity Index has fallen 17% within the past month. When expanded, however, the larger trend in the year-to-date frame still shows the index up about 13%.

^BC Chart

2 Funds to Get Agricultural Exposure

Most importantly, Gilbertie also highlighted a pair of exchange traded funds (ETFs) from Teucrium that investors should be aware of when looking to add agricultural exposure to their portfolios. He mentioned that advisors are well aware of commodities exposure to oil, but not as well-versed in agricultural options.

This is where Teucrium fills a void, offering investors an easy solution. Getting exposure to commodities doesn’t mean investors have to hold various positions.

“Our funds are efficiently structured to take out the problems of trading commodity funds,” Gilbertie noted.

Investors can have it all in the convenience of one ETF: the Teucrium Agricultural Fund (TAGS). The fund combines exposure to corn, wheat, soybeans, and sugar through other Teucrium ETFs that focus specifically on these commodities, essentially offering investors a fund of funds.

Funds featured in TILL:

  1. The Teucrium Corn Fund (CORN)
  2. The Teucrium Wheat Fund (WEAT)
  3. The Teucrium Soybean Fund (SOYB)
  4. The Teucrium Sugar Fund (CANE)

Gilbertie also mentioned another fund to consider: the Teucrium Agricultural Strategy No K-1 ETF (TILL), which provides investors with long-only futures price exposure to corn, wheat, soybeans, and sugar. One difference with TILL is that it does not issue a K-1 tax form, but rather a 1099 form.

TILL will hold one futures contract in each of the four markets (corn, wheat, soybeans, and sugar) excluding the front-month (aka spot) contract. TILL is also an actively managed fund, giving investors more dynamic exposure to the markets than that of TAGS.

For more news, information, and strategy, visit the Commodities Channel.

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