Agricultural ETFs Top S&P 500 in July: Here's Why

Inside the Rally in Corn Prices: Will the Rally Last?

Corn prices gained due to deteriorating crop conditions, hot and dry weather stress, and export demand. Investors should note that corn ethanol is a renewable liquid biofuel produced by fermenting and distilling corn starch, primarily blended into gasoline for transportation. With oil prices rising due to the Iran war, demand for ethanol was higher, and so was the demand for corn.

However, the CORN ETF has slumped 2.8% over the past week as improving weather across the U.S. Corn Belt has pressured corn prices, according to Trading Economics. Going forward, the outlook for corn prices will also depend on developments in the U.S.-Iran conflict.

Any pause in hostilities could weaken ethanol demand and weigh on corn prices. Conversely, a further escalation in the conflict would likely support higher corn prices.

What Happened to Soybean?

Soybean prices rallied due to strong international export demand, surging crude oil and biofuel momentum, and Black Sea trade disruptions. Note that China has agreed to purchase at least $17 billion worth of U.S. agricultural products annually through 2028.

The newly announced $17 billion annual commitment marks a major win for the U.S. farm belt, building on a baseline agreement reached during trade talks last October, when China agreed to purchase at least 25 million metric tons of American soybeans annually over three years (read: Agricultural ETFs to Gain as China Pledges to Buy $17B of US Crops).

The cumulative effect of the October 2025 soybean pledge and this new $17 billion annual commitment is likely to provide a powerful, multi-year revenue stream that should stabilize farm incomes, encourage planting, and directly benefit companies across the agricultural value chain. No wonder VanEck Agribusiness ETF MOO has added about 6% over the past month (as of July 28, 2026).

Inside the Wheat Rally

Wheat and corn exports out of the Black Sea were totally disturbed. Attacks on Black Sea ports, civilian vessels and agricultural infrastructure are alarming and have led to a sharp increase in global wheat prices, per a senior UN official, as quoted Gorgia Today.

With Russia and Ukraine targeting vessels and port facilities, the security of one of the world's most critical grain-export corridors is at stake. Upcoming movement in wheat prices depends on the development in Black Sea unrest.

However, with the huge spike seen over the past month, some level of unrest is probably baked in the wheat ETF. Hence, we may not see a steep surge from here in those agricultural ETFs.

Boost Your Portfolio with Our Top ETF Insights

Zacks' exclusive Fund Newsletter delivers actionable information, top news and analysis, as well as top-performing ETFs, straight to your inbox every week.

Don’t miss out on this valuable resource. It’s free!

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research