DB Agriculture ETF Could Gain Following Spring Rains

| About: PowerShares DB (DBA)

Just as winter was full of extreme weather – blinding blizzards and torrential downpours – much of the nation could be in for an equally soggy spring. That has farmers concerned, but it might be an opportunity for agriculture-related ETFs.

Rising production costs and the stability of commodity prices are on many producers minds. While herbicide programs are going swimmingly and weeds are not a threat, the rising cost of producing agriculture commodities and the prospect of too much rain weigh heavy, reports Elton Robinson for SouthEast Farm Press.

Major spring flooding may be in the offing for the Midwestern states. Sandy Shore for Associated Press reports that grain prices rose Wednesday amid speculation that wet, cooler weather could slow spring planting across much of the country. A weaker dollar, a rising stock market and a spike in demand for commodities are a potential formula for a rise in commodity and agriculture prices across the board.

Corn prices in particular could spike; acreage planted this year is expected to be the highest since World War II, but even that may not derail rising corn prices. Corn prices may rise 29% to $4.75 a bushel in a year, according to Goldman Sachs, reports The ETF Professor for Benzinga.

  • PowerShares DB Agriculture (NYSEARCA:DBA): Holds wheat, corn, soybeans and sugar futures, among others

Disclosure: None