Commodity ETFs May Feel Ripple Effects of Iran War

Over half the carbon in American bodies is estimated to come from a single source: Corn. (Bear with us, we promise there’s an ETF angle here.)

The country is highly dependent on corn, not just for crunchy chips, but also for making sweeteners, fuel and feed for industrially farmed animals. Production of that commodity may soon falter due to the closure of the Strait of Hormuz amid the US’s war with Iran. It’s not just petroleum that’s affected by the shutdown, as the waterway is also a major corridor for sulfur, ammonia and urea, ingredients in nitrogen-heavy fertilizers that help us grow a ridiculous amount of corn (and other crops). And unlike with oil, there is no strategic reserve in the US for nitrogen, said Jake Hanley, director of investments at ETF issuer and service provider Teucrium. 

“We basically operate on a just-in-time process here,” Hanley said. “People have no idea how much corn we consume … It’s up to 10% in your gas tank [in the form of ethanol],” and “globally, corn’s No. 1 use is to feed animals.”

Planting a Seed

Large-scale farmers are currently weighing whether they will prioritize planting corn or soybeans this spring, and that decision will be informed in part by the availability of fertilizer, Hanley said. While corn takes nitrogen from the soil as it grows, soy does the opposite, helping to fix nitrogen in the ground via the symbiotic relationship the legumes have with certain bacteria. In short, the country could produce less corn and more soy, affecting futures prices and the ETFs focused on them. But there are downstream effects of a potential corn shortage, which might raise costs across the food sector:

• About half of the global food supply is dependent on synthetic nitrogen fertilizers, chemical engineer Robert Rapier said in a recent Forbes article. About a third of such fertilizer comes from urea shipments, and the Middle East accounts for as much as half.
• This year, corn futures are up 5% after dipping slightly in 2025. Soybean futures have climbed nearly 15% year to date, and the effects of the war may not have been priced in yet. 
• The Teucrium Soybean Fund (SOYB) is up 12% year to date, and its Corn Fund (CORN) is up 5%.

So Much Corn: “The prices right now are near the cost of production … [Corn] supplies are shrinking globally, but we still have plenty,” Hanley said. “The longer this lasts, the more risk you have, as Brazil goes to plant. They’re on an opposite calendar as us.”