5 Best Wheat and Corn ETFs for 2022: Investing in the Global Food Supply

The Russian invasion of Ukraine, a major wheat and corn producer, has highlighted how important the global agriculture industry is. The health and sustainability of the global food supply chain are vital to feeding billions of people worldwide. Keep reading to learn more about investing in wheat and corn ETFs.

David Dierking   Updated March 30th, 2022

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Why invest in wheat and/or corn ETFs?

While the world knows Russia is a major producer of crude oil and fossil fuels, it’s also a big producer and exporter of wheat and corn. Even less known is the fact that Ukraine is as well! The two countries are both top five exporters of wheat, accounting for one-third of all wheat exports worldwide. Ukraine is the fourth largest exporter of corn, providing 12% of all exports.

The conflict has cut Russia off from the rest of the world economically. Ukraine may be unable to take advantage of the spring planting season. As a result, wheat and corn prices have soared.

From an investing standpoint, agricultural commodities are often absent from most portfolios. Investors focus on stocks, bonds, and real estate but usually neglect to round out their portfolios with food products, such as wheat and corn. These can be important risk-reducing diversifiers and, as we’ve seen recently, potentially profitable. Investing in commodities can pay off the most during times of inflation and economic shock.

Wheat and corn are important parts of the global economy, but not just where food is concerned. Outside of the food supply, corn, in the form of ethanol, a biofuel, has been used to reduce carbon emissions from transport.

How to invest in wheat and/or corn ETFs

The options for investing in wheat, corn, and other agricultural commodities are few, but there are some good ways to add exposure to your portfolio. Investing isn’t done by holding the physical grain itself. It’s done by adding exposure to futures contracts linked to the underlying commodities.

You’ll notice that some products about to be mentioned are ETFs (exchange-traded funds) and others are ETNs (exchange-traded notes). While their names make them sound similar, some important differences could make one more advantageous than the other.

ETFs vs. ETNs

You’re probably familiar with ETFs already. They invest in a basket of securities, most often stocks or bonds, and are often benchmarked to a popular index. The Vanguard S&P 500 ETF (VOO), for example, owns all components of the index.

ETNs are debt securities, not funds. They look and behave a lot like bonds. Issued by a financial institution, they can fluctuate in value, just like Treasuries and corporate bonds. Unlike a traditional bond, which offers a periodic interest payment, ETNs offer the return on an index. They can cover stocks, bonds, precious metals, or agricultural products.

There are some unique risks to ETNs. Since they are bond-like securities, they are exposed to the default risk of the issuer. If the issuer goes bankrupt, the ETNs likely become worthless. Also, ETNs are often thinly traded, which can make trading them more expensive and illiquid.

Now, let’s run down five different options for investing in wheat and corn.

Wheat and corn ETF/ETN list

  • Teucrium Wheat Fund (WEAT)
  • Teucrium Corn Fund (CORN)
  • iPath Series B Bloomberg Grains Subindex Total Return ETN (JJG)
  • ELEMENTS Linked to ICE BofAML Commodity index eXtra Grains – Total Return ETN (GRU)
  • Invesco DB Agriculture Fund (DBA)

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The best wheat and corn ETFs

Fund / TickerHoldingsTypeExpense RatioAssets ($m)2022 Performance
Teucrium Wheat Fund (WEAT)WheatETF1.14%50638%
Teucrium Corn Fund (CORN)CornETF1.95%22024%
iPath Series B Bloomberg Grains Subindex Total Return ETN (JJG)Wheat, corn, soybeansETN0.45%6027%
ELEMENTS Linked to ICE BofAML Commodity index eXtra Grains ETN (GRU)Wheat, corn, soybeansETN0.75%1630%
Invesco DB Agriculture Fund (DBA)Wheat, corn, soybeans, sugar, coffee, cocoa, cattle, etc.ETF0.93%1,84512%

As of 3/28/2022

Learn more about each fund.

Teucrium Wheat Fund (WEAT)

  • Investments: wheat
  • Expense ratio: 1.14%

WEAT is the only U.S.-listed product in the market that focuses solely on wheat.

Teucrium notes on the fund’s website that wheat is used for food, animal feed, fuel, starch, paper, particleboard, and plastic (!). Because demand for wheat is steady, this commodity often moves independently of the stock and bond markets. WEAT’s -0.74 correlation with the S&P 500 indicates that it usually moves in the opposite direction of stocks. This can make it a great risk reduction tool in a portfolio.

WEAT invests in a series of wheat futures contracts traded on the Chicago Board of Trade (CBOT). It will target the second-to-expire, third-to-expire, and the “following December” options contracts in 35%/30%/35% allocations. This is done to smooth out some of the short-term volatility of wheat prices and add liquidity to the portfolio. Because WEAT invests in futures contracts and not physical wheat, its price is unlikely to match the change in wheat prices.

Teucrium Corn Fund (CORN)

  • Investments: corn
  • Expense ratio: 1.95%

The Teucrium Corn Fund is the only fund targeting pure corn exposure.

Virtually everything we just discussed concerning WEAT is the same for corn. Corn has a similar negative correlation to stocks and is used for many of the same end products, including corn starch.

With a 1.95% expense ratio, CORN is the most expensive fund of this group. CORN is not a large fund, which adds to the operating cost, but any fund investing in futures contracts will likely be costly. These funds buy new contracts periodically, which can be expensive for shareholders.

iPath Series B Bloomberg Grains Subindex Total Return ETN (JJG)

  • Investments: Wheat, corn, soybeans
  • Expense ratio: 0.45%

WEAT and CORN are the only funds investing solely in those two grains, wheat and corn. Beyond them, investors will need to consider products that invest in a blend of commodities.

JJP links to an index of futures contracts for three grains: corn, soybeans, and wheat. Corn accounts for 37% of the index and wheat for another 29%. This is a potentially viable alternative to WEAT and CORN if you’re looking for an all-in-one option. The addition of soybeans to wheat and corn makes sense since they are all heavily farmed and in demand. The 0.45% investor fee rate is noticeably cheaper than both WEAT and CORN and makes a compelling case on cost alone.

JJG is an ETN and comes with the added risks discussed earlier. Plus, it only trades about 17,000 shares a day. That makes trading much costlier than other options. The low expense ratio is attractive, but the total cost doesn’t make it quite that advantageous.

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ELEMENTS Linked to ICE BofAML Commodity index eXtra Grains – Total Return ETN (GRU)

  • Investments: Wheat, corn, soybeans, soybean meal
  • Expense ratio: 0.75%

GRU is similar to JJG in both composition and structure, but it’s nearly twice as expensive. The note’s underlying index includes futures contracts on four physical commodities: corn, soybeans, soybean meal, and wheat. GRU is slightly more diversified than JJG, but also provides less direct exposure to wheat and corn.

With $16 million in total assets, it’s easily the smallest product in this group and the least efficiently traded. Trading spreads are high and the expense ratio of 0.75% is significantly higher than that of JJG. Comparing the two ETNs, JJG and GRU, directly, JJG wins on lower cost and greater wheat & corn exposure.

Invesco DB Agriculture Fund (DBA)

  • Investments: Wheat, corn, soybeans, sugar, coffee, cocoa, cattle, etc.
  • Expense ratio: 0.93%

With nearly $2 billion in assets, DBA is the largest ETF in the market focused solely on agricultural commodities. It invests broadly, which means it may not necessarily be the best choice if you want to focus only on wheat and corn. The pair are the two largest holdings within the fund but account for just 28% of total assets. DBA has the lowest exposure to wheat and corn of any product on this list.

DBA tracks the DBIQ Diversified Agriculture Index. It measures the performance of a broad basket of agricultural commodity futures contracts, including soybeans, sugar, cattle, coffee, cocoa, hogs, and cotton. It comes with an expense ratio of 0.93% and is the most cost-effective and diversified fund on the list.

💰 Which wheat or corn ETF should you pick?

  • This is a fairly easy decision. If you’re looking to invest in wheat or corn, it’s best to go with WEAT or CORN, which offer 100% direct exposure. They will be a bit costlier to own, but the pure-play nature of the funds makes them the better choice.
  • ETNs can be complicated to understand and best avoided in this case.
  • DBA is an attractive alternative, but only if you’re looking to invest in the entire agriculture space.

NOT INVESTMENT ADVICE. The content is for informational purposes only; you should not construe any such information as investment advice.

🔔 Did you know that you can also invest in farmland directly? Check out AcreTrader, one of the platforms that let you do just that.

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