Agriculture Exchange Traded Funds or ETFs are ETFs that enable traders to profit from ever-changing agriculture commodity prices. They are becoming increasingly popular and are growing in number. Investing in agriculture ETFs is considered a good way of diversifying the portfolio as agriculture commodity prices often move independent of stocks and exchange indexes.

Now there is a variety of agriculture ETFs available for trading.

• Some of them track single agriculture commodities such as wheat, soybean, cotton, coffee and sugar.
• Some track a particular type of commodity such as grains, soft commodities, etc.
• Livestock ETFs.
• Normal and leverage ETFs.
• ETFs which track specific agricultural indexes and ETFs which track futures price of specific commodities.
• ETFs which give same weightage to all commodities they track and ETFs which give more weightage to specific commodities.

Like the agricultural commodities, supply and demand is the main factor which controls the price of agricultural ETFs. The long-term and near-term predictions & news affect the price. Agricultural ETFs are good for all those traders who want to profit from changing commodity prices but do not want to trade the commodities directly. They are also good option for traders who want to hedge their portfolio, want to diversify the portfolio, and who trade futures & options on these commodities.

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