A market mystery: the ‘wheat whale’ that came out of nowhere

Nevertheless, it is undeniable that retail investors have played a role.

Amateur investors, many of whom took up trading during the epidemic, have emerged as a force in the market. Many of them gathered on the Reddit Message Board to discuss trading tips and strategies. Earlier last month, Teucrium Wheat ETF became a trend topic.

On March 7, a Reddit user with a “Quarantineder” handle suggested that the price of the ETF, which would reach a maximum that day, could go much higher. The author of the post argued that the Ukraine conflict would keep global wheat prices high for a long time. “I wouldn’t be surprised if we hit at least 20. I wouldn’t blink if you told me $ 40 by July.

The next day, another user, Terabytefury, observed that “wheat”, as a whole, was “always trading at a higher price, and was experiencing a lot of retail volume from people like us.”

Whether or not the wave of retail money at the Teucrium ETF causes the Chicago Agreements to be locked up, there is no doubt that the ETF has grown in popularity. On March 9, the SEC allowed Tucrium to make more shares. It is now allowed to add an indefinite number without seeking the blessing of the SEC

Future prices on the Chicago Mercantile Exchange stopped rising as wheat prices began to fall in other regions. But since the price hike, Teucrium ETF’s daily trading volume has fluctuated between a high of just 10 million shares on March 17 and a low of 2 million on Monday.

Andrei Sizov, a grain analyst based in Russia, said in an interview that the frenzy of buying Tucrium was an element of a much larger picture – where speculative investors, such as the Hedge Fund, bet that wheat prices would fall. -Watch guards by war and scrambled to buy new futures contracts to reduce their losses.

But Mr Sijov added that the fireworks had served a useful purpose in early March. He says much of the bad news that may come in the next few months about Ukraine’s ability to export wheat is probably already responsible for the price of wheat. What’s more, the initial rise in prices has prompted the United States and other governments to begin planning how to offset the prospect of a sharp drop in wheat supplies from Ukraine this year.

“It’s not really that bad, because if you just read the headlines, it might look like this,” said Mr. Sizzov.

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