Avoiding Grains For Now

Investors may want to avoid the grains market for now as several factors have created harvest abundance. The perfect combination of warm spring weather and good rains has shaped near ideal growing conditions for farmers. After a year of devastating global shortages, many nations seriously upped their grain production. Global acreage devoted to the 16 widely grown grain and oilseed crops has climbed to nearly 82 million acres since 2006.

All of this supply is keeping a downward pressure on prices and some analysts fear that if the global recovery stalls in any way, that these surpluses could result in huge supply gluts.

Long term, investing in grains makes sense as a play on increasing populations. However, over the short term, investors may want to avoid the iPath DJ-UBS Grains ETN (NYSE: JJG), ELEMENTS MLCX Grains Index ETN (NYSE: GRU) and the Teucrium Corn Fund ETV (NASDAQ: CORN) for now and revisit them latter at lower prices.