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 December 6 to December 12.
- OPEC’s deal to cut production by a record amount of 558,000 barrels helped lift oil and natural gas prices.
- Anticipation of the Fed’s upcoming meeting and concerns over rising interest rates depressed metal prices for the week.
- Agricultural commodities were the surprise winners this week with largely positive export news lifting future expectations.
- Be sure to check our previous week’s market update to keep track of the changes.
Weekly Market Wrap-Up
Energy – Oil was the big mover this week, thanks to a historic OPEC deal to cut production, with natural gas prices benefiting on the side track. The deal could be the start of a long-term rise in oil.
- Oil – Prices hit a new 17-month high, trading up to $54.48 intraday on Monday, after major oil producers agree to cut production over the weekend. It’s the largest production cut ever agreed upon by OPEC at 558,000 barrels, with Russia alone cutting production by 300,000 barrels.
- Natural Gas – The OPEC production-cut deal proved to be a boon for Asian LNG with spot prices rising by $0.50 to $8.10 per million British thermal units (mbtu). However, data on Monday revealed that temperatures may be warmer than initially expected, pushing natural gas prices for January delivery down 6.38% to $3.51 per mbtu.
- Coal – A report this week by an international agency revealed that coal is expected to grow just 0.6% between 2015 and 2021, with demand shifting to Asian markets and emerging economies.
Metals – Concerns over the upcoming Fed meeting and China’s economy proved to be negative influences on metals this week, with broad declines across the sector.
- Precious Metals – Gold dipped slightly this week, down 0.42%, as investors shifted their focus to rising interest rates. Meanwhile, silver futures for March jumped to $17.21 per troy ounce in an uncharacteristic divergence from gold.
- Others – Copper and platinum were the biggest losers in the metals space this week, down 2.81% and 0.91% respectively on worries that China’s consumption may be slowing more than expected.
Grains – Agricultural commodities were some of the biggest winners this week on positive export figures and higher than expected global demand.
- Corn and Soybean – Positive export sales data and momentum from last week’s trading activity were the main catalysts for corn and soybean gains this week. U.S. soybean shipments hit an all-time high for October at 11.3 million tons, which is 1.4 million more than the same period last year.
Soft Commodities – Sugar was a big loser in the soft commodities space this week, dropping 1.25%, mainly on a weaker Brazilian currency relative to the U.S. dollar.
If you want to know what type of commodity you should invest in, check out our commodity investing database.
Weekly Commodity Performers
Our screen for the best commodity performers of the week focused on those that had the highest impact on U.S. markets.
This week saw oil climb yet again, up 3.48%, while the agricultural commodities U.S. coffee and U.S. corn posted gains of 3.43% and 2.78% respectively.
| Commodity | Crude Oil | U.S. Coffee | U.S. Corn |
|---|---|---|---|
Contract expiration | Jan. 17, 2017 | Mar. 17, 2017 | Mar. 17, 2016 |
Settlement date | Dec. 20, 2016 | Mar. 21, 2017 | Mar. 14, 2017 |
Contract price (as of Dec. 12, 2016) | $52.69 | $142.68 | $360.75 |
52-week price change | $26.05 to $54.50 | $111.05 to $176.00 | $301.00 to $439.25 |
Weekly Commodity-Based ETF Movers
For ETF investors, we tracked the top three gainers and losers for the week. ETNs were excluded from our ranking, along with leveraged ETFs, which may not be suitable for some investors. Also excluded were ETFs that had a negative performance for the year – we instead focused only on those that were up YTD.
Top 3 ETF Winners for the Week
| ETF ticker | UNG | UNL | COMT |
|---|---|---|---|
ETF name | United States Natural Gas Fund | United States 12 Month Natural Gas Fund | iShares Commodities Select Strategy |
Commodity category | Natural gas | Natural gas | Broad commodity exposure |
Assets ($ millions) | $579.70 | $15.90 | $202.50 |
NAV | $9.42 | $11.39 | $34.39 |
Return (weekly %) | 8.28% | 4.59% | 1.33% |
Return (YTD %) | 8.65% | 17.42% | 21.42% |
Expense ratio | 0.60% | 0.75% | 0.48% |
Despite oil being one of the best-performing commodities this week, natural gas led the way for ETFs. However, the trend may only be temporary.
Top 3 ETF Losers for the Week
| ETF ticker | UGA | TAGS | UHN |
|---|---|---|---|
| ETF name | United States Gasoline Fund | The Teucrium Agricultural Fund | United States Diesel Heating Oil Fund |
| Commodity category | Gasoline futures | Broad agricultural commodities | Heating oil futures |
| Assets ($ millions) | $64.40 | $1.30 | $6.50 |
| NAV | $28.72 | $25.62 | $16.05 |
| Return (weekly %) | -2.68% | -2.66% | -1.65% |
Interestingly, despite the big gains in U.S. coffee and U.S. corn, a commodity ETF found its way onto our list of the biggest losers this week. Meanwhile, warmer than expected temperatures were the primary factors in gasoline and healing oil price drops.
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.
