My Agriculture Round Ups have definitely gotten the average investor to take a good look at this sector. Climate change, and current rising food prices are playing a role in opening people’s eyes. Long time readers know these two things were major criteria for my bull case. The full macro round up can be read here.

Recently I have gotten messages from investors who do not have the time to watch markets on a daily basis. They prefer the ETF method, and have asked what are some of the top Agriculture ETFs. This sector roundup will focus on the top five performing ETFs year to date. I want to emphasis the top performing part because you will see specific commodity ETFs make the top 5. In another roundup, I’ll list my favorite picks. This one is all about year to date performances, but with the caveat of good volume.

Two things to keep in mind when investing in ETFs. Firstly the volume. You want to be able to get in and out. This can sometimes be a problem with ETFs, hence why some major money like Dr. Michael Burry and Ray Dalio believe ETFs are the next bubble.

The second important thing is the management fee, or the management expense ratio (MER). Here are two definitions to note down:

The percentage of a fund’s average net assets paid out of the fund each year to cover the day-to-day and fixed costs of managing the fund. The figure is reported in the Fund’s annual management report of fund performance. MER includes all management fees and GST/HST paid by the fund for the period, including fees paid indirectly as a result of holding other ETFs.

The annual fee payable by the fund to the manager of the fund for acting as trustee and manager of the fund. This fee forms the largest portion of the MER. Typically, included in the management fee are the costs associated with paying the custodian and valuation agents, registrar and transfer agents, and any other service providers retained by the manager.

Before we dive into the top performing ETFs for the year, let’s do a quick round up on weekly performances.

Oats keep on trucking away. Very strong uptrend. Canola is in the midst of breaking out, and we shall see if momentum sustains into next week. Soy charts remain mixed with Soybean Oil being the most bullish of the bunch. In fact, Soybean Oil is a type of trade I would be placing on my account if my brokerage allowed Soybean Oil CFDs.

I have a feeling next weeks Agriculture Roundup will heavily feature Live and Feeder Cattle. Maybe the Carnivore edition. Feeder Cattle has broken out, while Lean Hogs still has a high probability of breaking out. I see an inverse head and shoulders on Lean Hogs. One of my favorite reversal patterns. Bullish on the confirmed breakout!

Here is the weekly performance up to Thursday. Not a surprise to see Feeder and Live Cattle, Oats, and Soybean Oil near the top of the list. Lean Hogs near the bottom, but I bet it will be near the top come next week.

So without further ado, here are the top 5 performing Agriculture ETFs for 2021. Actually, I take that back, there will be some fuss before we begin. One of the criteria I want to adhere to is an ETF with good volume. The top performing Agriculture ETF this year is ELEMENTS Linked to the ICE BofAML Commodity Index eXtra Biofuels Total Return. Or simply put, the ticker FUE. It is up 46.69% year to date, and is an ETF  that is designed to reflect the performance of a fully collateralized investment in the seven exchange-traded futures contracts on seven physical commodities: barley, canola, corn, rapeseed, soybeans, soybean oil and sugar. Great if you are bullish the grains like I am. But the volume is very low on this one.

iPath Series B BloomBerg Coffee (JO)

Well it shouldn’t come as a surprise to readers that the top performing Agriculture ETF, with a year to date performance of 43.73%, is all about coffee futures. Just a few weeks back, I posted my caffeinated edition of the Ag sector round up where we looked at all things coffee! Coffee futures are taking off on supply chain troubles due to weather and Covid in Brazil and Vietnam. This ETF (well technically an ETN) offers exposure to coffee futures. If you cannot play Coffee futures or CFDs, then this is one of the best ways to play it. Not much needs to be said about its holdings, it is 100% coffee. The management Expense Ratio is 0.45%.

A very strong weekly chart, with a break above $50.00 with a retest confirmed. That is the support level we are working with. With coffee popularity already high, and potential supply chain issues, I wouldn’t be surprised to see this in some long term portfolio’s.

 

Teucrium Sugar Fund (CANE)

You’ll probably be seeing Teucrium a few more times by the end of this roundup, but the Teucrium Sugar Fund ETF is up 40% year to date. This is a commodity pool offering exposure to a specific commodity. Sugar in this case. Maybe not one to hold for the long term with an expense ratio of 1.88%, but one to play tactically on the sugar market. Stock wise, Rogers Sugar (ticker RSI) is what pops into mind first. But one way to play this soft commodity if you cannot trade futures or CFDs.

Chart wise, CANE is near the resistance zone of $10.00. Sugar looks due for a pullback. We have been unable to break above $10.00 for 6 weeks so far. To the downside, $8.00 becomes major support. Once again, this is one to tactically play this specific soft commodity.

 

Teucrium Corn Fund (CORN)

Well, I wasn’t lying when I said you would be seeing Teucrium again. Much sooner that anticipated. Teucrium Corn Fund is up 30.30% year to date. This ETF has a high management fee of 2.19%. Another one for trading the soft commodity Corn specifically. Corn is the most traded and most important agricultural commodities. Most brokerages allow you to trade Corn CFDs. That’s what I do, and I am a fan of the chart. An interesting note on the prospectus on CORN is that managers mention this commodity has an appeal as an inflation hedge. Perhaps, but what we know is that prices will likely move higher.

CORN is forming a triangle here on the weekly chart and we just await the breakout. Bullish agricultural commodities? Then this is one to play tactically on the commodity itself.

 

Elements Rogers International Commodity Index (RJA)

This is an ETF that I follow because it was created by Billionaire Jim Rogers, who is very bullish agriculture. This ETF has an expense ratio of 0.75% and is up 24% year to date. A fan of agricultural commodities? RJA is structured as an exchange-traded note (ETN), a type of unsecured debt security that is similar to a bond but that does not make interest payments and trades on an exchange like a stock. The fund aims to replicate the performance of the Rogers International Commodity Index — Agriculture Total Return. This index is considered a well-known commodity benchmark and represents the value of a group of 20 agricultural commodities futures.

This is how Rogers ETF is allocated:

Chart wise, this one looks like one of the best! A breakout looks imminent. Plenty of commodities are covered that this is the first true full Agriculture commodities ETF so far. I will be watching for a weekly close above $8.20 in the next few weeks. It sets up a run to $9.00 and beyond.

 

Invesco DB Agriculture Fund (DBA)

We end off with one of the most popular Agricultural ETF and the largest in terms of total assets, the Invesco DB Agriculture Fund, ticker DBA. This ETF has an expense ratio of 0.94% and is up 19.02% year to date. DBA invests in a diversified basket of various agricultural natural resources, and as such can be a useful diversifying agent or inflation hedge. The targeted focus of this fund makes it often more appropriate for investors looking to implement a shorter term tactical tilt, though DBA may also be useful as a component of a long-term, buy-and-hold portfolio.

Here is the portfolio:

Chart wise. similar outlook as RJA. Major resistance zone. We either get a breakout in the next few weeks, or a reversal. This means that the agricultural commodities themselves are at a crossroads. Do we see more supply and inflationary issues? Or do agriculture commodities fall on more supply? Got a good feeling it will be the former and why we are bullish agriculture in general.

As mentioned in many ag sector roundups, I truly believe this sector is still flying under the radar. It is relatively cheap compared to everything else, meaning the upside potential going forward is huge. Factor in fundamentals like climate change and supply chain issues, and I think we have a real winner.