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Agricultural ETFs Top S&P 500 Two Months in a Row: Here's Why
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Key Takeaways
Weather and geopolitical risks are fueling a rally in agricultural commodities.
Corn, wheat and soybean ETFs are hovering near 52-week highs.
El Nino, trade tensions and a weaker dollar could extend the rally.
After outperforming the S&P 500 in July, Invesco DB Agriculture Fund (DBA - Free Report) (up 6.2%) has outperformed the S&P 500 (up 3.7%) over the past month (as of Aug. 28, 2026). Teucrium Corn Fund (CORN - Free Report) has returned over 12% over the past month while Teucrium Wheat Fund (WEAT - Free Report) has surged about 13%. Meanwhile, Teucrium Soybean Fund (SOYB - Free Report) has advanced about 8%.
WEAT, SOYB, CORN and Teucrium Agricultural (TAGS - Free Report) (up 13% over the past month) have been hovering around a 52-week high price. Corn and wheat prices have climbed to their highest levels in more than three years, as quoted on CNBC.
Let’s find out why.
Inside the Rally in Corn Prices
Corn prices gained due to deteriorating crop conditions, hot and dry weather stress, and export demand in the United States. Investors should note that corn ethanol is a renewable liquid biofuel produced by fermenting and distilling corn starch, primarily blended into gasoline for transportation. With oil prices rising due to the Iran war, demand for ethanol was higher, and so was the demand for corn.
Excessive heat and heavy rain threatened China’s corn yields and quality. China is the second-largest corn producer in the world, falling just behind the United States (per the data from USDA). Chinese corn imports rose 61.3% year over year to 1.36 million tons in January-July, boosting import demand if weather damage worsens, according to Trading Economics.
The outlook for corn prices will also depend on developments in the U.S.-Iran conflict and weather in the United States and China. U.S. sanctions on Iran could boost ethanol demand and lift corn prices further. Conversely, any pause in hostilities would likely support higher corn prices.
What Happened to Soybean?
Soybean prices rallied due to strong international export demand, surging crude oil and biofuel momentum, and Black Sea trade disruptions. Note that China has agreed to purchase at least $17 billion worth of U.S. agricultural products annually through 2028.
U.S. exporters have reported a series of soybean sales to China for the 2026/27 marketing year.Meanwhile, excessive heat and heavy rain hit China’s soybean yields hard, while declining U.S. crop ratings support prices. Markets also await a potential late-September Trump-Xi meeting that could influence agricultural trade, per Trading Economics.
Inside the Wheat Rally
Wheat and corn exports out of the Black Sea were totally disrupted. Attacks on Black Sea ports, civilian vessels and agricultural infrastructure are alarming and have led to a sharp increase in global wheat prices, per a senior UN official, as quoted on Georgia Today.
With Russia and Ukraine targeting vessels and port facilities, the security of one of the world's most critical grain-export corridors is at stake. Upcoming movement in wheat prices depends on the development of Black Sea unrest.
According to Jim McCormick, co-founder and chief operating officer at AgMarket, Europe’s drought-hit corn crop could push wheat prices higher as tighter corn supplies may encourage greater wheat use for animal feed and reduce wheat exports, as quoted on CNBC.
Ukraine’s agricultural exports are expected to fall by more than half this season from previous estimates, while Russian wheat exports are expected to decline by more than 50% in August from a year ago, per Trading Economics. This scenario, with questionable U.S. supplies, has made the wheat market tight.
Can the Rally Last?
Inclement weather and geopolitical tensions have been responsible for the rally in soft commodities. A strengthening El Niño pattern will likely keep the weather severe in the medium term and weigh on agricultural production.
Citi raised its price targets for corn, soybeans and wheat lately, heading into late 2026 and early 2027, due to a strengthening Super El Niño, as quoted on investing.com. Geopolitical tensions, too, are in place, calling for at least a moderate rally in agricultural products.
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Agricultural ETFs Top S&P 500 Two Months in a Row: Here's Why
Key Takeaways
After outperforming the S&P 500 in July, Invesco DB Agriculture Fund (DBA - Free Report) (up 6.2%) has outperformed the S&P 500 (up 3.7%) over the past month (as of Aug. 28, 2026). Teucrium Corn Fund (CORN - Free Report) has returned over 12% over the past month while Teucrium Wheat Fund (WEAT - Free Report) has surged about 13%. Meanwhile, Teucrium Soybean Fund (SOYB - Free Report) has advanced about 8%.
WEAT, SOYB, CORN and Teucrium Agricultural (TAGS - Free Report) (up 13% over the past month) have been hovering around a 52-week high price. Corn and wheat prices have climbed to their highest levels in more than three years, as quoted on CNBC.
Let’s find out why.
Inside the Rally in Corn Prices
Corn prices gained due to deteriorating crop conditions, hot and dry weather stress, and export demand in the United States. Investors should note that corn ethanol is a renewable liquid biofuel produced by fermenting and distilling corn starch, primarily blended into gasoline for transportation. With oil prices rising due to the Iran war, demand for ethanol was higher, and so was the demand for corn.
Excessive heat and heavy rain threatened China’s corn yields and quality. China is the second-largest corn producer in the world, falling just behind the United States (per the data from USDA). Chinese corn imports rose 61.3% year over year to 1.36 million tons in January-July, boosting import demand if weather damage worsens, according to Trading Economics.
The outlook for corn prices will also depend on developments in the U.S.-Iran conflict and weather in the United States and China. U.S. sanctions on Iran could boost ethanol demand and lift corn prices further. Conversely, any pause in hostilities would likely support higher corn prices.
What Happened to Soybean?
Soybean prices rallied due to strong international export demand, surging crude oil and biofuel momentum, and Black Sea trade disruptions. Note that China has agreed to purchase at least $17 billion worth of U.S. agricultural products annually through 2028.
U.S. exporters have reported a series of soybean sales to China for the 2026/27 marketing year.Meanwhile, excessive heat and heavy rain hit China’s soybean yields hard, while declining U.S. crop ratings support prices. Markets also await a potential late-September Trump-Xi meeting that could influence agricultural trade, per Trading Economics.
Inside the Wheat Rally
Wheat and corn exports out of the Black Sea were totally disrupted. Attacks on Black Sea ports, civilian vessels and agricultural infrastructure are alarming and have led to a sharp increase in global wheat prices, per a senior UN official, as quoted on Georgia Today.
With Russia and Ukraine targeting vessels and port facilities, the security of one of the world's most critical grain-export corridors is at stake. Upcoming movement in wheat prices depends on the development of Black Sea unrest.
According to Jim McCormick, co-founder and chief operating officer at AgMarket, Europe’s drought-hit corn crop could push wheat prices higher as tighter corn supplies may encourage greater wheat use for animal feed and reduce wheat exports, as quoted on CNBC.
Ukraine’s agricultural exports are expected to fall by more than half this season from previous estimates, while Russian wheat exports are expected to decline by more than 50% in August from a year ago, per Trading Economics. This scenario, with questionable U.S. supplies, has made the wheat market tight.
Can the Rally Last?
Inclement weather and geopolitical tensions have been responsible for the rally in soft commodities. A strengthening El Niño pattern will likely keep the weather severe in the medium term and weigh on agricultural production.
Citi raised its price targets for corn, soybeans and wheat lately, heading into late 2026 and early 2027, due to a strengthening Super El Niño, as quoted on investing.com. Geopolitical tensions, too, are in place, calling for at least a moderate rally in agricultural products.