This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

Commodity Market Higher In July, Driven By Supply-Side Concerns

NEW YORK, Aug. 8, 2012 /PRNewswire/ --  Commodity performance was positive in July, as deteriorating crop conditions in the US Midwest pushed grains prices higher.  

(Logo:   http://photos.prnewswire.com/prnh/20091204/CSLOGO )

Nelson Louie, Global Head of Commodities in Credit Suisse's Asset Management division, said, "Weather was a key driving factor pushing the index higher in July, with the primary beneficiaries being grains and natural gas.  Weather will likely continue to be a key idiosyncratic factor driving these components in the near future.  Meanwhile, more economically sensitive commodities, like base metals, will continue to be focused on macroeconomic factors.  Economic readings for the US and China were mixed and suggested slowing growth.  This, along with continued economic malaise in much of Europe, suggests further monetary easing measures may be likely."

Christopher Burton, Senior Portfolio Manager for the Credit Suisse Total Commodity Return Strategy, added, "However, inflation expectations remain anchored near historic levels with markets focused more on weak economic conditions than on the eventual impact of prolonged, exceptionally loose monetary policy on inflation.  This may lead to inflation overshooting expectations if economic activity begins to pick up more robustly than expected.  Commodities have historically tended to outperform during periods of higher than expected inflation.  Traditional asset classes, including equities and fixed income, may be impacted differently by these risks.  This should continue to drive short term cross-asset correlations lower.  We believe investors will continue to benefit from the long-term diversification benefits that commodities provide."

The Dow Jones-UBS Commodity Index Total Return was up by 6.47% in July.  Overall, 14 out of 20 index constituents posted positive returns.  Agriculture was the best performing sector, up 14.29% for the month.  An exceptionally warm and dry start to the summer in the US Midwest remained as the driving force behind grains performance.  Corn, up 28.33%, was the top performer in the index as the new crop entered the key pollinating and yield-setting period amid challenging weather conditions.  Energy increased, gaining 7.90%, led by Natural Gas.  Crude Oil and refined petroleum products were also higher amid fears that Iran was planning on disrupting supplies.  Iranian crude oil exports continued to decline under the weight of the European embargo and US sanctions.  The Precious Metals sector was relatively unchanged, up 0.52%, supported by the European Central Bank's pledge to protect the Eurozone and hopes for fresh stimulus in the US, but yet held back by doubts that serious efforts would be undertaken in the near future.  Livestock ended the month 2.02% lower, weighed down by sharply higher grain prices.  Industrial Metals decreased 2.48% as ongoing demand concerns due to macroeconomic weakness and uncertainty weighed on the sector.

The Credit Suisse Total Commodity Return Strategy group periodically produces updates on relevant industry topics. For a copy of the team's white paper, " Commodities Outlook: Increased Volatility, Increase Opportunity?", please contact your Credit Suisse Relationship Manager. 

About the Credit Suisse Total Commodity Return Strategy

1 of 4

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Try it NOW
Only $9.95
Try it NOW
14-Days Free
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
SYM TRADE IT LAST %CHG

Markets

DOW 17,712.66 +34.43 0.19%
S&P 500 2,061.02 +4.87 0.24%
NASDAQ 4,891.2190 +27.8570 0.57%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs