Déjà vu all over again. It was about this time last year that much of the U.S. was engulfed in a crushing heatwave that injected a fair amount of volatility into the commodity world; namely in the agriculture markets. With the U.S. dominating the production of a number of big name crops, the recent heatwave has caught the attention of a number investors looking to cash in on the trend [for more agricultural commodity news and analysis subscribe to our free newsletter].
Wheat is arguably one of the most important crops in the world, and currently ranks as one of the three most consumed grains across the globe. Wheat is prized for being relatively easy to grow, as well as for being able to flourish in a vast array of environments. The crop is also able to stay fresh for extended periods of time, allowing the it to be stored for a long duration. These qualities have made wheat a dietary stable in both developed and emerging markets [for more wheat news and analysis subscribe to our free newsletter].
This year saw a surge in popularity for commodity investing. As the years have passed, investors have seen the benefits of investing in the risky, but lucrative asset class. Commodities provide a protection against inflation as well as a low correlation to equities. One of the biggest problems within the industry was the lack of options available to investors just a few years ago. It used to be that only those with a complex futures account were able to add these securities to their portfolios. Now, there are hundreds of products to help even the smallest investor gain access to their favorite commodity investment. Below, we outline all of the commodity exchange traded products that hit the market this year [see also 12 High-Yielding Commodities For 2012].
Like just about every other asset class, agricultural commodities have been on a wild ride over the last several trading sessions, fluctuating along with equity markets as investors have tried to evaluate the latest news out of Europe. The last week has generally been a strong stretch for agricultural and soft commodities, as a rally in stock markets and return to risky assets has created a wave of moderate optimism among investors. The following table shows the performance of several popular commodity exchange-traded products for the week ended November 8. It should be noted that each of the funds included below utilizes futures contracts to achieve its stated objectives; as such, returns may not be reflective of changes in spot prices: