It is estimated that half of the carbon in the American body comes from one source: corn. (Stay with us, we promise there’s an ETF angle.)
The country is heavily reliant on corn, not only for corn chips, but also to make sweeteners, oil and feed for industrially raised livestock. Due to the closure of the Strait of Hormuz during the US war with Iran, the production of these goods may soon decrease. It’s not just petroleum that’s affected by the shutdown, as the waterway is also a major corridor for sulfur, ammonia, and urea, the nitrogen-heavy fertilizer components that help us grow ridiculous amounts of corn (and other crops). And unlike oil, there are no strategic reserves for nitrogen in the U.S., said Jack Henley, chief investment officer at ETF issuer and services provider Teucrium.
“We’re basically working on a time-to-time process here,” Hanley said. “People don’t realize how much corn we consume…it’s up to 10% in your gas tank (in the form of ethanol)” and “Globally, the No. 1 use of corn is animal feed.”
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Large growers are currently deciding whether to prioritize planting corn or soybeans in the spring, Hanley said, and that decision will be informed by fertilizer availability. While corn takes nitrogen from the soil as it grows, soybeans do the opposite, helping to fix nitrogen in the soil through the symbiotic relationship the grain has with certain bacteria. In short, the country could produce less corn and more soybeans, affecting futures prices and ETFs focused on them. But the potential shortage of corn has the following effects, which may increase costs in the food sector:
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Chemical engineer Robert Rapier said in a recent report that about half of the world’s food supply depends on synthetic nitrogen fertilizers. Forbes Article About a third of this type of fertilizer comes from urea transport, and the Middle East accounts for half.
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This year, corn futures for 2025 are up 5% after a slight decline. Soybean futures have risen nearly 15% over the past year, and the effects of the war may not yet be priced in.
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Theocram Soybean Fund ( SOYB ) is up 12% year to date, and its Corn Fund ( CORN ) is up 5%.
So much corn: “Right now prices are close to the cost of production … (corn) supply is going down globally, but we still have enough,” Hanley said. “The longer it goes on, the more risk you have, as Brazil goes into cultivation. They are on the opposite calendar to us.”
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