Teucrium WTI Crude Oil Fund: Another Way to Buy 12 Months of Oil Contango

Michael Johnston submits:Teucrium Trading LLC, the Brattleboro, Vermont-based firm that launched the first pure play corn ETF (CORN) earlier this month, has now filed for SEC approval on a slew of single-commodity funds offering exposure to everything from crude oil to soybeans. The five proposed products include:

Ron Rowland submits:Teucrium Trading last week (2/1/11) launched the Teucrium Natural Gas Fund (NAGS), providing investors with unleveraged exposure to natural gas futures contracts. The fund’s stated objective is to reflect the daily percentage change in the next March, April, October, and November Henry Hub Natural Gas Futures Contracts, weighted 25% equally in each contract month, less expenses.

While the price of WTI will probably appreciate relative to Brent over the next 12 months, the contract itself has lost its relevance as a marker for global oil markets For the first year since the futures were created, Brent crude is poised to overtake West Texas Intermediate oil as the world’s most-traded commodity.

According to a recent report from the Wall Street Journal, the New York Mercantile Exchange (NYMEX) reported faulty numbers to some investors on Friday. As a result of the incorrect numbers, the prices of gas and oil listed on the commodities exchange exhibited occasional dips and spikes, which did not happen in reality.

Michael Johnston submits:Teucrium, the issuer behind the only pure play corn ETF on the market, has doubled the size of its ETF lineup with the introduction of the Teucrium Natural Gas Fund (NAGS). The new fund will offer investors another option for gaining exposure to natural gas futures contracts through the exchange-traded structure.

Ron Rowland submits:If you want 100% exposure to crude oil contracts and their associated contango problems, plus you want to leverage up for another 100% exposure to large-cap U.S. stocks, then Morgan Stanley has just the product for you.

Oil bulls may be better off buying stocks and currencies, according to Societe Generale SA. While U.S. crude has jumped 27 per cent from a six-year low in March, returns are being eroded by a market structure called contango, whereby contracts for delivery in coming weeks are lower than later ones. Investors wanting to bet on prices rising need to sell the cheaper, expiring contracts at the end of each month and buy more expensive futures, reducing gains because of what’s known as a negative roll yield.

Price of the West Texas Intermediate (WTI) and Brent crude futures moved in opposite directions on Friday. The US crude oil benchmark fell yesterday because of a sell-off before Monday’s settlement of the October delivery futures, and the US dollar gaining strength major currencies in the world. Meanwhile, the global crude oil benchmark rose as the Organization of Petroleum Exporting Countries (OPEC) contemplated decreasing supply, which reduced fears of a supply glut.