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 20 to December 30.
- Oil and natural gas moved higher for the week on production cut expectations and lower-than-expected inventories.
- Metals staged a late rally as the U.S. dollar slipped from its high and investors focused on what 2017 might bring.
- Most commodities moved higher for the final week of 2016 after better-than-expected PMI and growth data came out of China.
Be sure to check our previous market update to keep track of the changes.
Weekly Market Wrap
Energy – Oil prices edged higher on production cut expectations, while natural gas jumped ahead on falling inventories.
- Oil – Prices ticked up last week with the Brent nearing last year’s high of $57.89 per barrel on a potential deal between OPEC and non-OPEC nations to cut production for 2017. The final week of the year also marked the ninth week in a row for a rise in U.S. oil rig counts.
- Natural Gas – A report showing a drop in natural gas inventories for the week ending Dec. 23 caused a rise in price to $3.45 MMBtu. Storage levels are now at just 3,360 Bcf – 10% lower than a year ago.
- Coal – Coal continues to face challenges after a report announced that solar will become cheaper than coal within 10 years. The industry faces a string of challenges, both from a political and fundamental standpoint, going into 2017.
Metals – Both precious metals and industrial metals became more bullish in the final week of 2016 as the USD slipped and investors looked for more infrastructure expenditures in 2017.
- Precious Metals – Gold hit a two-week high of $1,151.30 a troy ounce as the USD slipped despite fears of higher inflation and interest rates going into 2017. Geopolitical tension surrounding President Trump and Asia was largely to blame for the boost in precious metal values for the week.
- Others – Industrial metals staged a late rally for the final week of the year with copper climbing to $2.53 per ounce after a positive PMI report came out for China. Other metals like zinc, steel and aluminum showed positive gains as investors became more bullish for infrastructure spending going into 2017.
Check out our Precious Metals and Industrial Metals investment sections to learn more about how to invest in these commodities.
Grains – A report from the International Grains Council (IGC) showed record production in grains, soybeans and maize for 2016-2017 with expectations of higher prices going into 2017.
- Corn and Soybeans – Soybeans posted a losing streak last week with a late snap after higher-than-expected Chinese demand. Soybeans climbed to $10.06-1/2 a bushel and corn ticked up to $3.53-3/4 a bushel.
Softs – Sugar rebounded strongly after news that India’s crop production may be smaller than expected. Prices hit a multi-session high ending at $524.20 per lb for the week.
If you want to know what commodity is right for you, check out our Commodity Investing Database.
Weekly Movement Across Commodity Futures
For the final week of 2016, we analyzed all commodities by weekly performance and listed the top three performers by weekly percentage gain. All commodities were taken into account and analyzed from a performance perspective to find the top three.
| Commodity | Weekly Gain (%) | Contract Expiration | Settlement Date | Contract Price (as of Jan. 1) | 52-Week Price Change |
|---|---|---|---|---|---|
London Sugar | 6.76% | 12/16/17 | 11/30/17 | $524.20 | $367.2 to $619 |
US Wheat | 3.39% | 03/17/17 | 03/14/17 | $408.25 | $381.25 to $523.88 |
Brent Oil | 3.01% | 03/17/17 | 01/31/17 | $57.09 | $27.10 to $57.89 |
Sugar finally made its way into the top three weekly performers after being one of the worst performing commodities of late. U.S. wheat makes the list as well, alongside a perennial out-performer: oil.
Weekly Commodity ETF Movers
For ETF investors, we tracked the top three biggest gainers and top three biggest losers for the past week. Not included are ETNs, which behave differently than ETFs, or leveraged ETFs that may not be suitable for some investors. We also screened out ETFs with a losing performance overall for the year, showing only those with winning track records.
Top Three ETF Winners This Week
| ETF Ticker | ETF Name | Commodity Category | Assets ($ million) | NAV (as of Dec. 19) | Return (weekly %) | Return (YTD %) | Expense Ratio |
|---|---|---|---|---|---|---|---|
| CANE | The Teucrium Sugar Fund | Sugar | $5.50 | $13.00 | 6.04% | 29.22% | 1.76% |
| PALL | ETFS Physical Palladium Shares ETF | Palladium Bullion | $176.70 | $65.21 | 3.33% | 20.38% | 0.60% |
| UHN | United States Diesel Heating Oil Fund | Diesel Heating Oil | $6.70 | $16.78 | 2.88% | 34.78% | 0.60% |
Last week, sugar staged the strongest comeback after being recently listed as one of the worst weekly performers. Palladium, a metal that’s been rising on speculation, made the list along with a repeat performance from diesel heating oil.
Top Three ETF Losers This Week
| ETF Ticker | ETF Name | Commodity Category | Assets ($ million) | NAV (as of Dec. 19) | Return (weekly %) | Return (YTD %) | Expense Ratio |
|---|---|---|---|---|---|---|---|
| DBB | PowerShares DB Base Metals Fund | Industrial Metals | $280.40 | $14.92 | -0.27% | 25.59% | 0.75% |
| CPER | United States Copper Index Fund | Copper | $5.70 | $16.35 | 0.49% | 14.58% | 0.65% |
| SOYB | The Teucrium Soybean Fund | Soybeans | $13.00 | $19.10 | 0.69% | 10.21% | 3.49% |
Copper and industrial metals rounded out this week’s top losers along with soybeans. Interestingly, only PowerShares DB Base Metals Fund (DBB) actually posted a loss for the week, while all three have gains of more than 10% year-to-date.
We provide this report on a weekly basis. Be sure to check our News section to remain up to date on the latest happenings in the commodity space.
