An agricultural commodity in our ETF Watchlist – 02/03/2018

We include in our Watchlist the ETC Wheat (OD7S) offered by ETF Securities (ETFS), which aims to allow investors to expose themselves to wheat prices by replicating the performance of the Bloomberg Wheat Subindex  which presents a technically attractive configuration.

OD7S bears a 0.49% fee, with a liquidity of $ 87m. The index replicates futures contracts on wheat.

  • Wheat prices have been declining for more than 10 years due to chronic overcapacity, steady productivity gains and the use of GMOs. Wheat prices, however, are at 7-month high, while dry weather for the winter harvest in several US states has been supporting prices for several weeks. The cold spell that has fallen on Europe and the regions surrounding the Black Sea could also cause damage.
  • The technical configuration shows a new attempt to exceed the weekly EMA26, while the long-term configuration remains bearish. Exceeding the weekly EMA100 would give a serious reversal signal. It is too early to intervene but this configuration on wheat is to watch.

OD7S : weekly data