Exchange traded fund investors filled up on agricultural
commodities in July, while they continued to dial down solar
Teucrium Corn (
) popped 21% to an all-time high in July, outperforming all
nonleveraged ETFs. It rocketed 45% off its 52-week low in just
two months. The commodity posted its largest one-month gain in
five years amid the worst U.S. drought since 1954.
IPath Pure Beta Grains ETN (
) andiPath DJ-UBS Grains ETN (
) vaulted 20% each. Both broke out of deep 10-month long cup
bases. They both sport high RS in the low 90s. WEET has an
Accumulation-Distribution Rating of C and JJG's is A-.
WEET offers exposure to soybeans, corn, wheat, soybean meal
and soybean oil. JJG offers just soybeans, corn and wheat
Teucrium Agricultural (
) surged 16%. A new ETF, it holds a 25% stake each in Teucrium's
agricultural commodity ETFs tracking corn, wheat, soybean and
"The rapid rise for corn, wheat and soybeans is already
anticipating poor yields and disappointing harvests," said Tom
Graves, an equity analyst at S&P Capital IQ.
The latest crop report released by the U.S. Department of
Agriculture Monday shows conditions are deteriorating as they
have been every week for the past two months. Some 23% of the
U.S. corn crop was rated "very poor," up from 21% the prior
This time last year, only 5% of crops received the lowest
rating. A quarter of the corn crop was rated "poor," slightly up
from 24% the prior week. Only 3% of crops received the highest
rating of "excellent," similar to last week but considerably
worse than last year when 16% saw the highest rating.
Nearly 40% of U.S. soybean crops were rated in "very poor" or
"poor" condition, showing a deterioration over the prior week
when 35% of crops were rated the worst. Last year only 12% of
soybean crops saw the lowest ratings.
These are the poorest ratings for corn and soybeans since the
last major drought in 1988. Wheat conditions are generally fair
to excellent and are roughly the same as last year.
A record-setting heat wave across major growing states
couldn't come at a worse time for corn and soybeans as they enter
their reproductive stage of development, the USDA noted in its
weekly bulletin. Although parts of the eastern corn belt received
rainfall in mid-July, corn crops didn't benefit because they were
past the critical pollination stage.
Biggest ETF Losers
Solar energy ETFs led losers in July after solar module prices
continued to decline in the second quarter owing to overcapacity,
especially among Chinese manufacturers, and weak demand.
Guggenheim Solar (
) slumped 17% andMarket Vectors Solar Energy ETF (KWT) 15% to
fresh 52-week lows.
Industry leader First Solar (FSLR), a major holding in both
ETFs, saw earnings crater the past two quarters.
"As long as overcapacity remains significant in the PV
(photovoltaic) value chain, return to profitability for PV
manufacturers remains a wishful thinking," Alla Gorelova, an
analyst with Steubing AG Research, wrote in a client note last
Noting little if any pickup in demand this year, Gorelova
added: "Falling module prices, disastrous margins, financial
problems, and a very small likelihood of improving demand all
translate in an increasingly dire outlook for the rest of the
The solar energy industry morphed from being a technological
innovator into a high-volume commodity producer over the past
five years. After suffering several quarters of losses, a
majority of solar energy firms amassed loads of debt.
Both KWT and TAN have been trending lower since May 2008. TAN
-- the more popular of the two -- has cratered 38% year to date
and 74% in the past 12 months. It lost an average of 45% the past