US Direction submits listing application
Coffee, pork, juice price tracking
Foods that often appear in American breakfasts, such as pork and coffee, are included in ETFs. It is analyzed that inflation has even raised the price of a table, leading to the emergence of unique products.
According to Bloomberg News on the 20th (local time), U.S. ETF manager Direxion plans to launch a ‘Direxion Breakfast Commodities Strategy exchange-traded fund’ that follows the futures index of coffee, orange juice, pork, and wheat. . Direction submitted a listing application containing this information to the U.S. Securities and Exchange Commission (SEC).
Food prices included in the so-called ‘Breakfast ETF’ surged all at once last year. The Bloomberg Coffee Serve Index, calculated by Bloomberg itself, jumped 77% during this period. This is because Brazil, the world’s largest producer of coffee beans, suffered a sharp decline in production due to extreme weather such as drought and frost. The Bloomberg Pork Index and the Bloomberg Kansas Mill Serve Index rose 33% and 14%, respectively. “Agricultural prices rose sharply last year as demand increased due to government stimulus measures amid shortages of inventories due to supply chain disruptions,” Bloomberg said.
The reason orange juice futures are included in the ETF is because of the steep price rise. Orange futures prices have risen about 50% since the COVID-19 crisis. Florida, the nation’s main orange producing state, is forecast to have its lowest orange yield in 76 years as an insect-borne citrus green disease spreads. “The futures price of one of the most popular breakfast drinks (orange juice) has soared to its highest level since 2018,” Bloomberg said. If the SEC approves the breakfast ETF, it will create the only ETF that tracks the price of orange juice futures.
Direction has received listing applications for five other ETFs. They each track futures indices of coffee wood copper corn beans.
Reporter Se-min Heo semin@hankyung.com
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