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Understanding The Corn ETF’s Huge Premium

By: ETFdb
Last week saw another string of active sessions in commodity markets, with precious metals continuing their climb higher and agricultural ETFs soaring on supply concerns around the world. The most interesting performance of the week came on Friday, when the Teucrium Corn Fund (CORN) added more than 14% on trading volume ten times its daily average. The driver of the Friday rally was a supply-and-demand report from the United States Department of Agriculture (USDA) that conveyed sharper-than-expected reductions in estimates for corn supplies next year. The USDA projected 2010-2011 corn supplies below 1 billion bushels and projected stocks as a percentage of use at a 15-year low. While the rally in corn prices was not surprising in the wake of the USDA report, the performance of CORN in Friday trading perplexed some investors. CORN, which invests in corn futures contracts across three different maturities, jumped by about 14.6% on the [...] Click here to read the original article on ETFdb.com. Related Stories: Corn ETF Surges: Behind A Blockbuster Friday For Commodity ETFs What’s Gotten Into The Corn ETF? Corn ETF (CORN) Debuts
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