This post stems from fellow traders on Twitter today that mentioned how poorly the PowerShares DB Agriculture Commodity Fund had been acting as of late. As you can see, the ETF has fallen out of bed so we thought we’d take it step further and compare the funds performance to that of corn. There is no need for any fancy technical indicators to go along with this chart as you can clearly see the trend is down for both. The ETF and corn held a steady downtrend into the Spring of 2012 before exploding higher in the early part of summer due to the drought. The trend in 2013 looks similar to that of 2012 but the break seems to have started noticeably earlier this year. The trigger for the early slide in the fund could be linked to the fact that the economic outlook in the US is far better than this time last year. There continues to be more talk in the market about money flowing out of the fixed income/commodity markets and into equities. Bottom line, the performance of the fund certainly suggests agricultural commodities are not the investment of choice for Wall Street at the moment.
The fund includes: Feeder Cattle, Cocoa, Coffee, Corn, Cotton, Lean Hogs, Live Cattle, Soybeans, CME Wheat, KC Wheat, and Sugar.