- A wheat-based commodity ETF briefly ran out of shares to sell to investors following a price spike.
- The Teucrium Wheat Fund received approval from the SEC to sell more shares of its ETF on Wednesday.
- Wheat prices have soared as much as 70% since Russia launched its invasion of Ukraine.
A wheat-based commodity ETF briefly ran out of shares to sell to investors as investors piled into the fund amid a price spike in the grain.
The Teucrium Wheat Fund said it was forced to suspended the creation of new shares of its ETF on Monday due to soaring demand from investors. The commodity-based ETF operates as a commodity pool and had a fixed amount of 7.4 million shares it could sell to investors.
Amid the brief suspension of creating new shares, the Teucrium Wheat ETF was still available to trade by investors through their brokers, though it stood the chance to trade at a premium to its underlying net asset value. The SEC ultimately granted the fund approval to create new shares on Wednesday.
"The Securities and Exchange Commission has accelerated a new registration statement filed by the Fund for an indefinite amount of new shares and the offer and sale of the Fund's shares have commenced," the Teucrium Wheat Fund said on Wednesday.
The increased investor interest in the wheat-based ETF comes amid Russia's invasion of Ukraine, a country that is often referred to as Europe's bread basket due to its large production of the grain. Combined, Russia and Ukraine are responsible for more than 20% of the world's wheat production.
The likely disruption in this year's wheat harvest led to wheat future prices soaring as much as 70% to a record $13.64 per bushel in Chicago on Tuesday. Since that peak, wheat prices have dropped 19% to $10.99 per bushel.
The surge in wheat prices sets Teucrium up for a big windfall if assets in the ETF stay as elevated as they are now. The fund, which launched in 2011, has seen its assets under management spike to a record $455 million as of Wednesday, according to data from Koyfin. On Monday alone, the ETF saw $170 million in inflows.
Prior to the breakout in wheat prices, the Teucrium Wheat ETF had assets under management of about $70 million. With an expense ratio of 1.14%, the ETF is poised to bring in as much as $5 million in annual revenue for Teucrium, which specializes in offering investors exposure to commodities via ETFs.
