Tag Archives: DJCI

Russia, Where’s The Wheat?

Wheat lost more than 8% in July from the near perfect weather that brought the agriculture sector down to its lowest in four years.  Now, in the first week of August the DJCI All Wheat Total Return is already up 5.4% MTD through Aug 7, despite a 1.2% loss for the day. However, Russia’s food trade ban has implications that 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 […]

Now Your Penny Is Worth More: It’s What’s On The Inside That Counts

Do you know what is inside that seemingly copper penny? It may be more valuable than you think. I’ll give you a hint: It rhymes with think. Inside the industrial metals, we usually speak of copper and aluminum, especially in the context of the spread trade where it seems aluminum is perpetually more abundant than Read more […]

Weighing In: On Diversification

Diversification is one of the main reasons investors use commodities in their portfolios. Despite the fact that in only 4 years since 1970 did commodities and equities drop in the same year (1981, 2001, 2008, 2011), investors lost confidence in commodities as a diversifier as the correlation spiked with equities after the crisis. That confidence is starting to 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 […]

Weighing In: On Inflation

In my last post, I introduced a series called “Weighing In:” that includes comparisons of the effectiveness of the Dow Jones Commodity Index (DJCI) and the S&P GSCI to reach certain portfolio goals.  Although there are a number of reasons investors use commodities, diversification and inflation protection are the two most common. According to Blu Putnam, Managing Read more […]

Weighing In: Reaching Your Goal Weight

“Weighing In:” will be a series of posts comparing and contrasting the impact of different weighting schemes within commodity indices. The series will be the first to feature our two headline indices, the equally weighted Dow Jones Commodity Index (DJCI) and the world production weighted S&P GSCI.  The purpose of the series is to help you reach your portfolio goals Read more […]

No Bread And Water After Doomsday

According to farmers, doomsday predictions by climate scientists don’t matter.  Doomsday already happened on June 26, 2011 – at least in Vega, Texas where temperatures reached 114 degrees Fahrenheit and winds were 40-50 mph. We speak about weather conditions as a driver of commodity prices on a regular basis. We discuss droughts, freezes, hurricanes and even ideal Read more […]

Backwardation Bonanza!

If you experience your most expensive 4th of July ever, it may be from the unprecedented shortages of commodities in June.  Since 1970, as far back as the S&P GSCI has data, there has never been a June with as many commodities in backwardation as in June 2014. Of 24 commodities in the S&P GSCI, 23 of which are in Read more […]

Dow Jones Commodity Index Wins Independence

There could be no more symbolic time than just before the July 4th holiday for S&P Dow Jones Indices (S&P DJI) to announce the Dow Jones Commodity Index (DJCI), an alternative to the former DJ-UBS. This is the first ever commodity index under the Dow Jones brand to be fully free from conflicts of interest, plus Read more […]