Volatility, Natural-Gas, Food Funds Slump

Two of the three food-related investments target grain, with ELEMENTS Linked to the MLCX Grains Index Total Return(GRU) and iPath Dow Jones-UBS Grains Subindex Total Return ETN(JJG) crumbling 11% and 9.5%, respectively. The underlying index for Elements grains comprises 46% wheat, 27% corn, 19% soybeans and 8.9% soybean oil. On top of lackluster global wheat demand, the USDA is expecting the U.S. to produce the second-largest wheat crop on record, limiting the likelihood of a sustained rally.

The iPath Dow Jones-UBS Livestock Subindex Total Return ETN(COW) sank 5.5%. Cattle ranchers that suffer through weak global demand for meat and high corn prices in 2008 are looking at an upcoming corn crop that may be the second largest ever. Feedlots are buying more young cattle, adding to the herd size in an attempt to take advantage of the lower feeding costs. This may limit upside potential for beef prices.

Worst-Performing ETFs in the Third Quarter Source: TheStreet.com Ratings

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