Tag Archives: coffee

Coffee Drips to a New Low

Over the past five years, the S&P GSCI Coffee underperformed the other soft commodities, as can be seen in Exhibit 1. Broad oversupply issues that have been seen in most commodities have been particularly pronounced in the coffee market. In addition to the major coffee-producing countries’ respective economic problems, these countries also generally suffer from Read more […]

July 2019 Commodities Performance Highlights – A Nickel for Your Thoughts

Commodities markets hit the summer doldrums in July. The S&P GSCI was down 0.2% for the month and 13.1% YTD. The Dow Jones Commodity Index (DJCI) was down 0.8% in July and up 6.1% YTD, reflecting its lower energy weighting. Impressive rallies in nickel and silver markets were pitched against a slump in agriculture prices, Read more […]

Commodities Performance Highlights – June 2019

Commodities markets resumed their upward trajectory in June. The S&P GSCI was up 4.4% for the month and up 13.3% YTD. The Dow Jones Commodity Index (DJCI) was up 3.1% in June and up 6.9% YTD, reflecting its lower energy weighting. A recovery in petroleum prices and an impressive rally in gold were the main Read more […]

Fed Up With High Prices? July Opened A Window of Opportunity

After much economic activity this week, the Fed announced inflation moved “somewhat closer” to the objective and is showing signs of firming after running below its 2% target for the past two years.  In the last June report from the United States Department of Labor, food prices continued to increase although at a slower pace and unleaded gasoline prices had Read more […]

Climate Change May Destroy The Risk Premium

I fear the risk premium for agriculture and livestock may vanish sometime soon as climate change and El Nino drive up food prices. When investing in commodities as an asset class there are five components of return to be earned by using futures. While each component’s contribution to performance varies through time depending on the Read more […]

Another Fuel In The Fire: The Base Case

Finally, in April, commodities got hot enough to turn around even the base metals (also known as the industrial metals,) up 1.8% for the month. Although this comeback is not driven by the main supply shocks we are experiencing in energy and agriculture, it is fundamental in nature.  China’s State Reserves Bureau (SRB) is now buying copper Read more […]

COMMODITY COMEBACK

It is no surprise that now might be the perfect environment for brewing commodities.   The S&P GSCI was up 4.5% in February and was in backwardation for the first time in February since 2004. In 2004, the S&P GSCI returned 17.3%. 22 of 24 commodities in the S&P GSCI were positive in February. All 5 sectors were positive, led by agriculture, Read more […]

Silver Anchors and Pains

Psychologists have studied feelings of Olympic medalists  for decades to find: “If you set aside the happy people who win gold and look only at the people who come in second and third, it’s the men and women with bronze medals who invariably look happier than the athletes who won silver.” To investors who have Read more […]

WARNING: Hot Coffee May Burn

There are too many funny coffee jokes to single one out but this one I found seriously relevant: Though I take my coffee black, I also take it seriously since it is one of the commodities in the S&P GSCI and DJ-UBS. Coffee has been the best performing commodity this year, up 23.9%.  As I Read more […]

COMMODITY ZODIAC: Prosperous Horse

Happy Chinese New Year for all celebrating!  As a special tribute, this post will focus on the fact that all 5 commodities that start with the letter “c” (the same letter China starts with) in the S&P GSCI Agriculture and Livestock have had positive returns in 2014.  I picked the agriculture and livestock to symbolize the importance Read more […]