It looks as if wheat exporters are great again. After being displaced by Russia in August 2016, the U.S. has regained its title as the world’s top exporter of the grain—for now.
Interestingly enough, the investigation into possible collusion between Donald Trump’s campaign and Russia has driven the U.S. dollar’s devaluation since the start of the year, which in turn has made U.S. exports cheaper for overseas buyers. Egypt, Algeria, Mexico and Japan all reportedly increased their purchase amounts of American wheat.
Two years ago, it was the Russian ruble’s weakness—prompted by the dramatic decline in oil prices and international sanctions following Russia’s occupation of Ukraine—that gave Russian exporters an edge. Coupled with a bumper crop, the country outpaced both the U.S. and European Union, then the leader.
As I said earlier, the dollar has declined 5.5 percent year-to-date, helping to give American exporters an edge. According to Bloomberg, the U.S. is expected to ship more than 28 million metric tons of wheat this season, an increase of 34 percent compared to the same time last year.
The Teucrium Wheat Fund (NYSE:WEAT) was trading at $6.81 per share on Tuesday afternoon, down $0.11 (-1.59%). Year-to-date, WEAT has declined -1.02%, versus a 8.09% rise in the benchmark S&P 500 index during the same period.
About the Author: Frank Holmes
Frank Holmes is the CEO and chief investment officer of U.S. Global Investors. Mr. Holmes purchased a controlling interest in U.S. Global Investors in 1989 and became the firm’s chief investment officer in 1999. In 2006, Mr. Holmes was selected mining fund manager of the year by the Mining Journal, and in 2011 he was named a U.S. Metals and Mining “TopGun” by Brendan Wood International. He is also the co-author of The Goldwatcher: Demystifying Gold Investing. More than 30,000 subscribers follow his weekly commentary in the award-winning Investor Alert newsletter which is read in over 180 countries.
Under his guidance, the company’s mutual funds have received recognition from Lipper and Morningstar, two trusted independent financial authorities. In 2015, Mr. Holmes led the company into the exchange traded fund (ETF) business with the launch of the U.S. Global Jets ETF, which invests in the global airline sector.
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