CANE.NYSE ARCATeucrium Commodity Trust
10-Q: Teucrium Commodity Trust Reports Q3 2024 Financial Results, Cites Market Volatility and Geopolitical Factors
Sentiment:
Quarterly Report
Teucrium Commodity Trust's Q3 2024 report reveals a complex financial landscape influenced by market volatility, geopolitical events, and fund-specific performance.
Worse than expectedThe report indicates a general decrease in net assets for most of the funds compared to the previous year, suggesting worse than expected performance.The report indicates a net loss for most of the funds compared to the previous year, suggesting worse than expected performance.
Summary
- Teucrium Commodity Trust, a Delaware statutory trust, consists of five series: Teucrium Corn Fund (CORN), Teucrium Sugar Fund (CANE), Teucrium Soybean Fund (SOYB), Teucrium Wheat Fund (WEAT), and Teucrium Agricultural Fund (TAGS).
- The Hashdex Bitcoin Futures ETF (DEFI) was a series of the Trust prior to a merger closing on January 3, 2024.
- The report covers the period from January 1 to September 30, 2024.
- The report highlights the investment objectives of each fund, which aim to reflect the daily changes in their respective commodity markets.
- The report notes that the occurrence of severe weather events, natural disasters, terrorist attacks, geopolitical events, outbreaks, or public health emergencies may have significant adverse effects on the Agricultural Funds and their investments.
- The report also notes that the ongoing conflict in the Middle East, coupled with disruptions caused by Russia's invasion of Ukraine, could lead to unforeseen challenges in the world's commodities, which could lead to additional volatility in commodity futures contracts.
Sentiment
Score: 5
Explanation: The sentiment is neutral, reflecting a factual reporting of financial results with both positive and negative aspects. The report highlights both challenges and opportunities in the commodity markets.
Positives
- The report provides a detailed overview of each fund's investment objective and strategy.
- The report includes a quantitative analysis of the hypothetical impact of price changes on each fund's holdings and NAV per share.
- The report includes a discussion of the regulatory considerations that affect the funds.
Negatives
- The report notes that the occurrence of severe weather events, natural disasters, terrorist attacks, geopolitical events, outbreaks, or public health emergencies may have significant adverse effects on the Agricultural Funds and their investments.
- The report notes that the ongoing conflict in the Middle East, coupled with disruptions caused by Russia's invasion of Ukraine, could lead to unforeseen challenges in the world's commodities, which could lead to additional volatility in commodity futures contracts.
Risks
- Market risk associated with trading in commodity and cryptocurrency interests.
- Credit risk that counterparties will not be able to meet their obligations.
- Regulatory risk associated with changes in the regulation of futures markets.
- Risks associated with position limits, aggregation limits, accountability levels, and price fluctuation limits.
- Risks arising from the Israel-Hamas war.
Future Outlook
The report contains forward-looking statements regarding future events and financial results, which are subject to various factors, risks, and uncertainties.
Industry Context
The announcement provides insight into the performance of commodity ETFs, reflecting broader trends in agricultural markets and investor sentiment towards commodity investments.
Comparison to Industry Standards
- Comparable companies include other commodity ETF providers such as Invesco, WisdomTree, and Aberdeen Standard Investments.
- Performance is assessed against benchmarks like the Bloomberg Commodity Index and individual commodity futures contracts.
- The report does not provide a direct comparison to these industry standards, but the financial metrics and performance data allow for such comparisons to be made.
Management Changes
| Role | Previous Person | New Person | Effective Date | Reason |
|---|---|---|---|---|
| Class A member of the Sponsor | Dale Riker | Van Eck Associates Corporation | 2024-05-10 | Settlement agreement |
Legal Proceedings
- A settlement agreement (Agreement), by and among Teucrium Trading, Salvatore Gilbertie, Carl Miller III, Cory Mullen-Rusin, Steve Kahler, and Dale and Barbara Riker, was entered into as of April 26, 2024 and became effective on May 10, 2024.
- The Agreement resolves all of the claims raised in the actions captioned Dale Riker v. Sal Gilbertie et al., C.A. 656794/2020 (N.Y. Supreme Court), Sal Gilbertie, et. al. v. Dale Riker, et al., C.A. 2020-1018-LWW (Del. Ch.) and Dale Riker, et al. v. Teucrium Trading, LLC, C.A. 2022-1030-LWW (Del. Ch.).
Related Party Transactions
- The Sponsor is entitled to a management fee calculated as a fixed percentage of each Agricultural Funds NAV, currently 1.00% of its average net assets.
- The Sponsor has the ability to elect to pay certain expenses on behalf of the Funds or waive the management fee.
Stakeholder Impact
- Shareholders are exposed to market risk and credit risk.
- Shareholders are subject to regulatory changes.
- Shareholders are subject to the performance of the underlying commodity markets.
Key Dates
| Date | Description |
|---|---|
| 2009-09-11 | Teucrium Commodity Trust organized as a Delaware statutory trust. |
| 2010-06-07 | Initial Form S-1 for CORN declared effective by the SEC. |
| 2010-06-08 | Four Creation Baskets for CORN were issued representing 200,000 shares and $5,000,000. |
| 2010-06-09 | CORN began trading on the New York Stock Exchange (NYSE) Arca. |
| 2011-06-13 | Initial Forms S-1 for CANE, SOYB, and WEAT were declared effective by the SEC. |
| 2011-09-16 | Two Creation Baskets were issued for each Fund, representing 100,000 shares and $2,500,000, for CANE, SOYB, and WEAT. |
| 2011-09-19 | CANE, SOYB, and WEAT started trading on the NYSE Arca. |
| 2012-02-10 | The Form S-1 for TAGS was declared effective by the SEC. |
| 2012-03-27 | Six Creation Baskets for TAGS were issued representing 300,000 shares and $15,000,000. |
| 2012-03-28 | TAGS began trading on the NYSE Arca. |
| 2022-03-09 | Current registration statement for WEAT declared effective by the SEC. |
| 2022-04-07 | Current registration statements for CORN, CANE and SOYB declared effective by the SEC. |
| 2022-09-15 | Five Creation Baskets for DEFI were issued representing 50,000 shares and $1,250,000. |
| 2023-10-30 | Agreement and Plan of Partnership Merger and Liquidation dated as of October 30, 2023 (the Plan of Merger). |
| 2024-01-03 | The Merger closed on January 3, 2024 (the Closing Date). |
| 2024-09-30 | End of the quarterly period. |
| 2024-11-11 | Date as of which the number of shares outstanding of each of the issuers classes of common stock is indicated. |
| 2024-11-12 | Date of report. |
Keywords
Teucrium, Commodity, Futures, Corn, Soybean, Sugar, Wheat, Agricultural, ETF, Fund, Investment, DEFI, TAGS, WEAT, SOYB, CANE, CORN
Disclaimer:The information provided here is for general informational purposes only and does not constitute financial advice, recommendation, or endorsement of any kind. It may contain errors or omissions. You should not rely on this information to make financial decisions. Always seek the advice of a qualified financial professional before making any investment or financial decisions. Use of this information is at your own risk.