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 December 12 to December 19.
- The coal industry came under attack this week as the exiting Obama Administration attempted to clamp down on coal before leaving the White House.
- The Fed raised rates by 25 bps this week, sending interest rate expectations higher and prices of precious metals lower.
- Overall, commodities had a poor performance for the week with only U.S. coffee and crude oil posting gains.
- Be sure to check our previous week’s market update to keep track of the changes.
Weekly Market Wrap-up
Energy – Oil keeps trending higher, while coal and natural gas slipped this week on political maneuvering and milder weather expectations.
- Oil – Prices ticked up last week on reports of shrinking global oversupply going into 2017. After the production cut deal last week, most analysts expect oil to trade between $53 and $57 for at least the next month or so. In case you’re wondering what drives oil prices, check out this article.
- Natural Gas – Prices dropped to a two-week low of $3.35 MMBtu (per million British thermal units) as milder weather is expected going forward. A warm weather front is expected to blow through the U.S. this week, despite a drop in temperatures last week.
- Coal – The Obama Administration announced new policies this week that will cost coal companies an additional $81 million per year in order to comply. However, the Republicans have already made plans to counter it once Trump takes office.
Metals – Higher interest rate expectations lifted the U.S. dollar and sent precious metal prices lower this week.
- Precious Metals – The U.S. dollar inched higher towards a 14-year high against a basket of foreign currencies sending gold down to $1,134.75 a troy ounce. The prospect of higher interest rates also sent silver lower, falling by 6.92% for the week.
- Other – Copper and other industrial metals ticked slightly higher this week with copper trading up to $5,532 per tonne. The 3-month aluminum price traded up to $1,718 per tonne.
Grains – Corn and soybeans continue to be the biggest winners in the agricultural space.
- Corn and Soybeans – Prices rose this week with wheat stocks hitting a 30-year high. Corn and soybean prices are expected to keep moving up going forward on higher production, while the price of wheat is likely to fall on lower demand. March corn futures rose to $3.47 per bushel and January soybean futures rose to $9.59.
Softs – Sugar was the biggest loser for the week as an increase in Brazilian production sent prices down to $490.10 per tonne.
If you want to know what commodity is right for you, check out our Commodity Investing Database.
Weekly Movement Across Commodity Futures
Our screen for the top commodity performers for the week included all commodity assets regardless of volume or global economic impact.
This week saw few gains in the commodities space. U.S. coffee topped the list this week, marking the second week in a row on our list of biggest weekly gainers. Crude oil saw modest gains as well. Interestingly, the third best commodity performer, heating oil, declined slightly – but less so than all other commodities this week.
| Commodity | Contract expiration | Settlement Date | Contract Price (as of Dec 19) | 52-Week Price Change |
|---|---|---|---|---|
U.S. Coffee | Mar 17 | Mar 21, 2017 | $144.20 | $111.05 - $176 |
Crude Oil | Feb 17 | Jan 20, 2017 | $53.34 | $26.05 - $54.51 |
Heating Oil | Jan 17 | Dec 30, 2016 | $1.67 | $0.85 - $1.71 |
Weekly Commodity ETF Movers
For ETF investors, we tracked the top three biggest gainers and top three biggest losers for the past week. Not included are ETNs, which behave differently than ETFs, as well as leveraged ETFs, which may not be suitable for some investors. We also screened out ETFs that have a losing performance overall for the year, showing only those with winning track records.
Top Three ETF Winners This Week
| ETF Ticker | ETF Name | Commodity Category | Assets ($) | NAV (as of Dec 19) | Return (weekly %) | Return (YTD %) | Expense ratio |
|---|---|---|---|---|---|---|---|
| UGA | United States Gasoline Fund | Gasoline | $66,600,000 | $29.60 | 1.27% | 1.16% | 0.60% |
| UNL | United States 12-Month Natural Gas Fund | Natural gas | $15,554,000 | $11.12 | 0.45% | 14.64% | 0.75% |
| UHN | United States Diesel Heating Oil Fund | Heating oil | $6,588,000 | $16.43 | 0.24% | 31.97% | 0.60% |
Gasoline, natural gas and heating oil ETFs are once again among the best weekly commodity-based ETF performers, with UNL making the list for the second week in a row.
Top Three ETF Losers This Week
| ETF Ticker | ETF Name | Commodity Category | Assets ($) | NAV (as of Dec 19) | Return (weekly %) | Return (YTD %) | Expense Ratio |
|---|---|---|---|---|---|---|---|
| PDBC | PowerShares DB Optimum Yield Diversified Commodity StrategyPortfolio ETF | Commodity-Linked Futures | $454,396,300 | $16.98 | -7.06% | 8.78% | 0.59% |
| DBS | PowerShares DB Silver Fund | Silver | $30,348,000 | $24.98 | -6.58% | 14.22% | 0.79% |
| SLV | iShares Silver Trust ETF | Silver | $5,452,785,200 | $15.17 | -6.30% | 15.01% | 0.50% |
It was a bad week for silver as evidenced by two silver ETFs making the list for worst weekly commodity-based ETF performers.
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.
