10-Q: Teucrium Commodity Trust Reports Mixed Q3 2025 Results Amid Volatile Markets

Teucrium Commodity Trust's Q3 2025 filing reveals a decrease in overall net assets, with varied performance across its agricultural funds, and highlights ongoing geopolitical and market volatility risks.

Summary

• Teucrium Commodity Trust's combined net assets decreased to $211,541,516 as of September 30, 2025, from $224,647,418 at December 31, 2024.
• The Trust reported a net loss of $(22,813,701) for the nine months ended September 30, 2025, an improvement from a net loss of $(34,492,480) for the same period in 2024.
• Net change in unrealized appreciation on commodity futures contracts significantly improved to $6,916,245 for the nine months ended September 30, 2025, compared to $2,340,515 in 2024.
• Interest income for the Trust decreased to $6,758,274 for the nine months ended September 30, 2025, from $10,273,773 in 2024.
• Teucrium Corn Fund (CORN) experienced a net asset decrease of 23% year-over-year, with its NAV per share falling to $17.45 from $18.48, but its net loss improved to $(3,262,976) from $(11,235,560).
• Teucrium Soybean Fund (SOYB) saw a slight increase in net assets by 2% year-over-year, with its net loss significantly improving to $(151,279) from $(4,178,596), and a positive total return of 0.14% for the nine months.
• Teucrium Sugar Fund (CANE) net assets decreased by 7% year-over-year, shifting from a net income of $897,568 in 2024 to a net loss of $(587,099) in 2025, and a total return of -7.14%.
• Teucrium Wheat Fund (WEAT) net assets decreased by 15% year-over-year, with its NAV per share falling to $4.11 from $5.24, and a total return of -14.79%, worsening from -12.42% in 2024.
• Teucrium Agricultural Fund (TAGS) net assets decreased by 33% year-over-year, with its net loss improving to $(645,513) from $(1,576,379).
• A settlement agreement resolving legal claims was entered into on April 26, 2024, and became effective on May 10, 2024, leading to Van Eck Associates Corporation replacing Dale Riker as a Class A member of the Sponsor.

Sentiment

Score: 3

Explanation: The overall sentiment is negative due to a decline in combined net assets, net losses for most funds, and a worsening total return for the Wheat Fund. While some funds showed improved net income/loss, the pervasive market volatility and geopolitical risks highlighted in the outlook suggest continued challenges.

Positives

• The Trust's combined net loss for the nine months ended September 30, 2025, improved to $(22,813,701) from $(34,492,480) in the prior year.
• Net change in unrealized appreciation on commodity futures contracts for the Trust significantly increased to $6,916,245 for the nine months ended September 30, 2025, from $2,340,515 in 2024.
• Teucrium Corn Fund (CORN) showed an improved net loss of $(3,262,976) for the nine months ended September 30, 2025, compared to $(11,235,560) in 2024.
• Teucrium Soybean Fund (SOYB) achieved a positive total return of 0.14% for the nine months ended September 30, 2025, a significant improvement from a -14.69% loss in 2024, and its net loss improved to $(151,279) from $(4,178,596).
• Teucrium Agricultural Fund (TAGS) improved its net loss to $(645,513) for the nine months ended September 30, 2025, from $(1,576,379) in 2024.
• Total expenses, net, for the combined Trust decreased to $5,579,323 for the nine months ended September 30, 2025, from $6,208,941 in 2024.

Negatives

• Teucrium Commodity Trust's combined net assets decreased by $13,105,902 to $211,541,516 as of September 30, 2025, from $224,647,418 at December 31, 2024.
• Interest income for the combined Trust decreased by $3,515,499 for the nine months ended September 30, 2025, compared to the same period in 2024.
• Teucrium Corn Fund (CORN) experienced a 6% decrease in NAV per share and a 19% decrease in shares outstanding year-over-year.
• Teucrium Sugar Fund (CANE) shifted from a net income of $897,568 in 2024 to a net loss of $(587,099) in 2025, and its total return turned negative at -7.14%.
• Teucrium Wheat Fund (WEAT) saw its total return worsen to -14.79% for the nine months ended September 30, 2025, from -12.42% in 2024, and its NAV per share decreased by 21%.
• Teucrium Agricultural Fund (TAGS) experienced a 33% decrease in total net assets year-over-year, driven by a 23% decrease in shares outstanding and a 13% decrease in NAV per share.

Risks

• Geopolitical instability and military hostilities (e.g., Russia-Ukraine, Middle East conflicts) can negatively impact commodity prices, global transportation, and supply chains, leading to volatility.
• Natural or environmental disasters, widespread disease, and public health emergencies can disrupt economies and markets, affecting commodity prices and investment values.
• Volatility in commodity prices due to supply/demand imbalances, which can be influenced by global economic conditions and weather patterns.
• Contango, a market condition where distant delivery prices for futures exceed spot prices, can adversely impact fund returns as contracts approach expiration.
• Credit risk that counterparties (e.g., FCMs, swap counterparties) may not meet their contractual obligations.
• Illiquidity of investments during periods of extreme market volatility, potentially preventing prompt liquidation of positions.
• Regulatory changes in futures markets (e.g., CFTC, Dodd-Frank Act, position limits, aggregation limits, daily limits) could alter investment strategies or ability to operate.
• Dependence on weather patterns for agricultural yields makes funds susceptible to changing weather conditions.
• The Sponsor cannot predict when current high levels of volatility in global commodity markets will subside, leading to ongoing uncertainty.

Future Outlook

Global corn consumption is projected to continue growing due to population increases, a rising global middle class driving demand for protein, and increased use of biofuels. However, future growth in planted acres and yield for agricultural crops may be constrained by limited productive land and inadequate infrastructure. Geopolitical events, particularly the Russia-Ukraine conflict and Middle East tensions, are expected to sustain high volatility in commodity markets, impacting prices, global transportation, and supply chains. The Sponsor anticipates that volatility, trading volumes, and prices in global corn, soybean, sugar, and wheat markets will remain elevated indefinitely and cannot predict when these conditions will subside.

Management Comments

• The change in total net assets year over year for CORN was generally due to a combination of a depreciation of commodity prices and investor out-flows, driven by excess supply estimates and mandates for plant-based renewable fuels contributing to weakness.
• The change in total net assets year over year for SOYB was generally due to a combination of a depreciation of commodity prices and investor inflows, driven by decreased supply estimates and mandates for plant-based renewable fuels contributing to weakness.
• The change in total net assets year over year for CANE was due to the stabilization of prices worldwide, strong demand, and modestly higher production, which accelerated investor interest.
• The change in total net assets year over year for WEAT was generally due to a combination of the depreciation of commodity prices and investor in-flows, which may be attributed to ample wheat stocks from Russia and record exports flowing from the Black Sea continuing to weigh on global wheat prices.
• The change in total net assets year over year for TAGS was generally due to a combination of depreciation of commodity prices and investor out-flows, driven by ample supply estimates and stabilization of prices worldwide.
• The Sponsor cannot predict the impact of factors such as seasonality, availability of substitutes, global economic conditions, and geopolitical events on fund performance.
• The Sponsor has no ability to discern when current high levels of volatility in global commodity markets will subside.

Industry Context

The agricultural commodity markets are currently influenced by a complex interplay of global supply and demand dynamics, geopolitical tensions, and macroeconomic factors. USDA reports indicate a tight balance between global production and consumption for corn, soybeans, and wheat, with consumption slightly exceeding production for corn and wheat, and slightly lower for soybeans. Geopolitical conflicts, particularly the Russia-Ukraine war and Middle East tensions, are significantly amplifying market volatility, impacting key export regions (e.g., Russia and Ukraine for wheat) and global supply chains. The industry faces challenges in expanding planted acres and yields due to land and infrastructure limitations, making it highly susceptible to weather-dependent production. The prevalence of contango or backwardation in futures markets continues to be a critical factor affecting returns, with recent events potentially placing upward pressure on commodity prices, leading to backwardation in some holdings.

Comparison to Industry Standards

• Global corn consumption is projected to reach 1,289 Million Metric Tons (MMT) for 2025-26, slightly exceeding global production of 1,287 MMT, as per the September 2025 USDA report.
• The U.S. is estimated to produce approximately 33% of global corn and export about 18% for Crop Year 2025-26, with global consumption increasing over 659% from 1960/1961 to 2025/2026.
• Global soybean production is concentrated in the U.S. (117 MMT, 27%), Brazil (175 MMT), and Argentina (49 MMT) for Crop Year 2025-26, with global consumption of 424 MMT slightly lower than production of 426 MMT.
• Sugarcane accounts for nearly 80% of world sugar production, with global production estimated at 189.3 MMT for 2025-26, driven by higher production in Brazil and India offsetting declines in the European Union.
• The U.S. produces approximately 6% of global wheat, exporting about 47% of that, with global consumption of 815 MMT slightly lower than production of 816 MMT for 2025-26.
• Russia and Ukraine historically contribute approximately 30% of total global wheat exports, making the ongoing conflict a significant factor in global wheat prices and supply.

Management Changes

Legal Proceedings

• A settlement agreement was entered into on April 26, 2024, and became effective on May 10, 2024, resolving all claims in actions captioned Dale Riker v. Sal Gilbertie et al., Sal Gilbertie, et. al. v. Dale Riker, et al., and Dale Riker, et al. v. Teucrium Trading, LLC.

Related Party Transactions

• The Agricultural Funds (except TAGS) pay a monthly management fee to the Sponsor, Teucrium Trading, LLC, at a rate of 1.00% per annum of average daily net assets.
• Certain aggregate expenses common to all Funds are allocated by the Sponsor based on activity drivers, including legal, auditing, accounting, tax-preparation, regulatory compliance, trading activities, and insurance costs, as well as fees paid to the Marketing Agent.
• A portion of these aggregate common expenses are related to services provided by the Sponsor or its principals, primarily for accounting, financial reporting, regulatory compliance, and trading activities, included as distribution and marketing fees.
• The Sponsor has the discretion to pay certain expenses on behalf of the Funds or waive the management fee, and has determined that no reimbursement will be sought for waived expenses in future periods.

Stakeholder Impact

• Shareholders may experience continued volatility and potential losses due to declining net assets and negative returns in several funds, exacerbated by global market uncertainties.
• Investors seeking indirect exposure to commodity markets or hedging strategies face risks associated with the underlying commodity markets and tracking deviations.
• The Sponsor, Teucrium Trading, LLC, continues to manage the Trust and its funds, receiving management fees and allocating expenses, with some expenses waived to benefit the funds.
• Service providers (Custodian, Administrator, Marketing Agent, Clearing Brokers, Trustee) continue to provide essential services, receiving fees as per contractual agreements.

Next Steps

• The Sponsor will continue to manage the Funds' investments to track their stated benchmarks, adjusting for creation or redemption of shares.
• The Sponsor will close out existing futures positions and reinvest proceeds in new commodity interests in response to scheduled benchmark changes or at its discretion.
• The Sponsor will continue to monitor and manage credit risk by executing trades with creditworthy parties and requiring collateral where appropriate.
• Management will continue to evaluate the impacts of new accounting pronouncements, specifically ASU 2024-03 and ASU 2023-07, on financial statements and disclosures.

Key Dates

Recommendation

The Teucrium Commodity Trust presents a mixed financial picture with overall declining net assets but some improvements in net income/loss for certain funds. The significant geopolitical and market volatility risks, coupled with the Sponsor's inability to predict when these will subside, suggest continued uncertainty. While the Soybean Fund showed positive returns, the Corn, Sugar, and Wheat Funds experienced negative performance. The settlement of legal proceedings and management changes provide some stability, but the fundamental market conditions remain challenging. A 'hold' recommendation is appropriate for existing investors to monitor the impact of ongoing market dynamics and the effectiveness of the Sponsor's strategy in navigating these volatile conditions, while new investors should exercise caution given the high-risk environment.

Keywords

Commodity Trust, SEC Filing, 10-Q, Agricultural Futures, Corn Futures, Soybean Futures, Sugar Futures, Wheat Futures, Commodity ETFs, Financial Performance, Market Risk, Geopolitical Risk, Contango, Backwardation, Net Asset Value, Investment Funds