The Teucrium Corn Fund (NYSEARCA:CORN) provides direct exposure to corn without the need for a futures account. The fund is designed to reduce the effects of backwardation and contango, by holding 3 Corn Futures Contracts that are traded on the Chicago Board of Trade ("CBOT"). The contracts are (1) the second-to-expire CBOT Corn Futures Contract, weighted 35%, (2) the third-to-expire CBOT Corn Futures Contract, weighted 30%, and (3) the CBOT Corn Futures Contract expiring in the December following the expiration month of the third- to-expire contract, weighted 35%, less the Fund's expenses.
The share price of CORN is currently at $19.29, and has been trading downward within a descending channel since the start of 2015. By all appearances, the price of CORN is bearish and I propose taking a small short position on this fund but also buy deep out-of-the-money call options to protect against a breakout. There are some risks that will be considered later in this article.