Now that the first quarter of 2012 is in the books, investors will reflect on their holdings to see if it is time to make any adjustments. While most equities turned in one of the best first quarters in recent memory, not all commodities were quite as lucky. As always, commodity price drivers often vary considerably from general equities, so it should not come as a surprise to see some of the more severe losses that some of these assets have posted. For those looking for the next cheap buy, or commodities that have been on a tear, we outline some of the best and worst performing futures from the first quarter of this year [see also 12 High-Yielding Commodities For 2012].
There were a fair amount of commodities that held their ground during the previous quarter, but the results may not be what you expected, as big name assets like gold failed to make an appearance [see also Forget Gold, Why Your Portfolio Needs Silver].
- Soybeans / Soybean Meal: This agricultural commodity saw its prices jump significantly in Q1, as soybean meal futures gained approximately 24% and soybeans futures jumped a respectable 17%. Investors interested in making a play on this commodity can seek futures and options on the CBOT or the Soybean ETF (SOYB) from Teucrium.
- Gasoline RBOB: RBOB, standing for Reformulated Gasoline Blendstock for Oxygen Blending, simply refers to the gasoline that consumers get at the pump and the respective futures are up just over 21% on the year. As many are fully aware, gas prices have been surging around the nation as crude prices have risen and speculators have priced in a possible supply glut due to Syrian issues. One sure way to hedge your frustration at the pump is to invest in RBOB futures on the NYMEX or in the United States Gasoline Fund LP (UGA), an ETF that invests in gasoline futures [see also Ultimate Guide To RBOB Gasoline Investing].
- Canola Oil: A relatively unknown commodity, canola oil futures gained roughly 18% in Q1. Investors looking to make a play on the commodity will find options few and far between, but the ICE offers futures contracts with the ticker symbol RS.
- Crude Brent Oil: Brent oil has gained a lot of attention given its rise versus West Texas Intermediate crude; brent futures jumped by about 16%. One of the biggest factors behind brent’s rise has been instability in the Middle East and uncertainty as to the future of oil production from that resource-rich region. Investors will find several options to invest in brent contracts on the NYMEX and can also utilize the United States Brent Oil Fund (BNO), and ETF that invests in futures contracts.
- Platinum: A member of the precious metals category, platinum futures soared by roughly 14% in Q1, beating out the likes of silver and gold, which have long been the most popular metals. Investors looking to play platinum have a wealth of options available, but some of the most readily accessible are the contracts offered on the NYMEX and the physically-backed ETF PPLT [see also Does GLD Really Hold Gold, Or is it a Scam?].
While there were a number of commodities who had a rough start to 2012, there are three in particular that jump out to investors.
- Natural Gas: No surprise here. Not only has NG been one of the worst assets of 2012, but it has been on a slippery slope for nearly four years, as it has failed to establish any meaningful period of upward mobility. Natural gas sank by approximately 30% during Q1, but calling a bottom for this commodity seems like a tall order. Those looking to bet against this commodity should look at the new 3x Inverse Natural Gas ETN (DGAZ) which has been surging since inception [see also 25 Ways To Invest In Natural Gas].
- Coffee: Coffee futures are a member of the softs family and have been subjected to a tough start to the new year. Prices have slipped by roughly 18% as it has upheld its reputation for high volatility. Investors can find coffee futures on a number of exchanges and can also utilize the Dow Jones-UBS Coffee ETN (JO).
- Milk: Milk futures may seem silly to most investors, but they serve a very practical purpose for farmers and were among the best performing commodities of 2011. Unfortunately, this year has not been so kind, as losses of roughly 9% have plagued the asset. Investing directly in milk is difficult, but not impossible, as the CME offers several choices for whichever milk you may fancy [see also 2011′s Best Performing Commodity Was……Milk?].
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Disclosure: No positions at time of writing.