CommodityHQ.com provides weekly information about any material impact of a major economic, corporate and/or geopolitical event on the global commodities market. The report also analyzes the weekly change in prices of the major commodity futures and commodity focused ETFs as a result of market changing events and trends. This report covers events and analysis for the week ranging from November 28 to December 5.
- Oil is up this week on investor expectations of a tighter market next year.
- Trump’s international trade policies could affect a wide array of commodities and impact global markets.
- Gold is down for another consecutive week, setting a trend that could follow into 2017.
Weekly Market Wrap-Up
Energy – Outlook is mostly positive over the short and long term with the exception of coal, which could face long-term fundamental challenges. With the election over, make sure to read which commodity sectors could benefit under the Trump presidency.
- Oil – Unsurprisingly, oil has been a news headline this past week with reports that OPEC’s oil output hit a record high in November, despite the deal to cut production beginning in 2017. Supply jumped from 33.82 million barrels per day (mbpd) in October to 34.19 mbpd in November, while oil prices climbed to the mid-50s on the possibility of tighter markets next year. Considering that oil demand is expected to be the same next year as this year according to OPEC, a reduction in supply could boost prices even higher. Explore our Crude Oil Investing section to learn more about this commodity.
- Natural Gas – Prices recently hit a new 2-year high at $3.65 per million British thermal units on increasing demand expectations. Much of U.S. natural gas is shipped to Mexico, which could potentially face changes with President Trump’s vow to renegotiate NAFTA. You can track the latest happenings in this space from our dedicated Natural Gas section.
- Coal – On the other hand, coal faces a slew of fundamental challenges that seem to mark the end of an era despite President Trump’s platform to make America energy independent and to revitalize the coal industry. While coal has seen some gains following the election, investors should stay away from coal over the long term.
Metals – Precious metals took a hit this week on interest rate fears, while industrial metals enjoyed gains stemming from better-than-expected Chinese data.
- Precious Metals – Gold fell again last week to a 10-month low at $1,171.11, indicating a bearish trend following what’s been a red letter year for precious metals. Silver is following suit as well. A widely expected Fed interest rate hike this month has investors worried that higher interest rates could spell the end of easy gains in the safe-haven assets. Be sure to refer to our precious metals section to learn more about various investing options and strategies.
- Others – Steel and aluminum on the other hand have seen gains, up 48.81% and 16.51% year-to-date, respectively, thanks to higher-than-expected demand from China. But like many other commodity traders, investors will need to watch the new U.S. policies regarding China going forward.
Grains – Crop acreage shortages helped boost prices recently, but record production yields could eliminate those gains over the long term.
- Corn and Soybean – Record yields of corn and soybeans are creating a storage capacity crunch with shortages being reported all over the Midwest. Reports show that storage shortages could last well into 2017 with analysts predicting the highest wheat and corn yields since 1988.
Soft commodities – This space was the weak link last week with drops in cotton and cocoa prices. Sugar hit a new 6-month low of $18.89 cents per pound.
Check out our commodity investing database to know what commodity is right for you.
Weekly Commodity Performers
In order to track the top three commodity performers this week, we focused on those with high trading volumes and those with the largest impact on U.S. markets. Commodities with low economic impact like orange juice were not included in our screening process.
This week saw big gains in several commodity sectors. U.S. crude oil saw some of the biggest gains at 13.35%, while natural gas climbed 8.57%. The biggest surprise of the week was U.S. corn’s jump of 6.53%.
| Commodity | Crude Oil | Natural Gas | U.S. Corn |
|---|---|---|---|
| Contract expiration | Jan 17, 2017 | Jan 17, 2017 | Mar 17, 2017 |
| Settlement date | Dec. 20, 2016 | Feb. 28, 2016 | Mar. 14, 2016 |
| Contract price(as of Dec. 5, 2016) | $51.29 | $3.60 | $358.75 |
| 52-week price change | $26.05 – $52.40 | $1.611 – $3.66 | $301 – $439.25 |
Weekly Commodity ETF Movers
For ETF investors, we tracked the top three biggest gainers and top three biggest losers for the past week. Not included are ETNs, which behave differently than ETFs, as well as leveraged ETFs which may not be suitable for some investors. We also screened out ETFs that have a losing performance overall for the year, showing only those with winning track records.
Top Three ETF Winners This Week
| ETF ticker | BNO | DBO | USO |
|---|---|---|---|
| ETF name | United States Brent Oil Fund | PowerShares DB Oil Fund | United States Oil Fund |
| Commodity category | Oil | Oil | Oil |
| Assets ($) | $122,601.50 | $473,500.00 | $3,106,495.20 |
| NAV | $15.17 | $9.40 | $11.35 |
| Return (weekly %) | 10.65% | 9.18% | 8.72% |
| Return (YTD %) | 23.94% | 3.87% | 3.18% |
| Expense ratio | 0.90% | 0.78% | 0.45% |
No surprise that the top three ETF gainers for this week were in the oil sector. Interestingly, despite this week’s performance, the 2nd and 3rd largest ETF movers haven’t posted year-to-date gains above 4%. That falls in line with investor activity this week following the announcement that OPEC will tighten oil production next year making oil gains a relatively new development this year.
Top Three ETF Losers This Week
| ETF ticker | GEUR | CANE | DGL |
|---|---|---|---|
| ETF name | Gartman Gold/Euro ETF | The Teucrium Sugar Fund | PowerShares DB Gold Fund |
| Commodity category | Gold | Sugar | Gold |
| Assets ($) | $22,436.00 | $5,661.00 | $219,762.00 |
| NAV | $12.45 | $12.46 | $37.67 |
| Return (weekly %) | -4.23% | -3.63% | -2.03% |
| Return (YTD %) | 10.77% | 23.86% | 8.68% |
| Expense ratio | 0.77% | 1.76% | 0.78% |
Investors should note that the top losers for this week should be taken with a grain of salt considering that all three have actually outperformed two of the top winners for the week. If you’re looking for more insight, feel free to browse through relevant ETFs within some of the major commodity subcategories on our website
We provide this report on a weekly basis. Be sure to check our News section to remain updated on the latest happenings in the commodity space.
