Here’s our monthly look at how the various Commodity ETFs are stacking up against the commodities they are supposed to track. Typically, we’d just tell you to read ‘em and weep, but as you’ll notice below, corn futures actually underperformed the long-only corn ETF (CORN) for the 2nd month this year. Why? As we’ve explained before, the commodity ETFs typically trade within the closest three months of a contract, which we compare against the futures contract for December delivery. Well, today’s USDA report indicated a much tighter supply of corn in the near-term, while also forecasting a record amount of corn planted for harvest later this year. This caused the May corn contract to move limit-up ($0.40 higher) today, but moving the December contract only $0.16 higher.
These ETFs are trying to track the short-term cash movement in these commodities, which means they are far more responsive to short-term supply and demand rather than long-term trends. In this case, that strategy has resulted in a short-term victory for CORN, but as our final scorecard from last year demonstrated, victories like that are usually only enjoyed momentarily.
NOW you can read ‘em and weep.
