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 January 9th to January 16th.
- Saudi Arabia cut production more deeply than the OPEC deal called for, sending oil prices higher for the week.
- Brexit fears re-entered investors’ minds this week, helping precious metal values rise.
- Agricultural commodities were hit by increased selling pressure and higher production yields.
Weekly Market Wrap-up
Energy – Energy markets had something to be bullish about after Saudi Arabia cut production more than the OPEC deal called for while natural gas got a boost from lower reserves. You can explore the Energy section to learn more about investing in this commodity segment.
- Oil – Saudi Arabia cut crude oil production by more than expected to less than two million barrels per day (mbpd) as part of its recent OPEC deal – a two year low. Saudi Arabia has plans to cut the production level even further in February.
- Natural Gas – Natural gas reserves fell by more than expected, sending prices soaring up to $3.50 by the end of the week.
- Coal – Coal remains under pressure with western U.S. states railing against Trump’s plans to revive the industry and bring back the 200,000 jobs lost since 1980.
Metals – Fears of a Brexit panic and additional worries surrounding the Trump administration were largely responsible for a rise in precious metal prices while copper rose on positive data.
- Precious Metals – Brexit and Trump fears helped gold rise to $1,210.95 per ounce. Silver rose as well to $17.03.
- Other – Copper enjoyed gains this week following upbeat U.S. and Chinese economic data before slipping slightly on Monday as traders sold off some of their positions. Copper ended the week trading at $2.62 per ounce.
Grains – A report that winter wheat acres hit the lowest level since 1909 put the commodity solidly in the grip of a bear market.
- Corn and Soybeans – Increased corn production in Brazil negatively impacted prices while soybean production similarly experienced an increase in yields.
Softs – Profit-selling in Indian cotton put downward pressure on prices this week and could spell the beginning of a downward trend for cotton.
If you want to find out which commodity is right for you, check out our Commodity Investing Database.
Weekly Movement Across Commodity Futures
This week, we analyzed all commodities by weekly performance and listed the top three performers by weekly percentage gain. All commodities were taken into account with the exception of Brent oil (to avoid showing both Brent and crude) and analyzed from a performance perspective only to find the top three.
| Commodity | Weekly Gain (%) | Contract Expiration | Contract Price (as of Jan. 16) | 52-Week Price Change |
|---|---|---|---|---|
| Natural Gas | 6.31% | 02/17/17 | $3.50 | $1.611 - $3.994 |
| Crude Oil | 3.36% | 02/17/17 | $52.32 | $26.05 - $55.24 |
| Heating Oil | 3.22% | 02/17/17 | $1.66 | $0.85 - $1.76 |
Natural gas is the big winner this week as reserves fell more than expected while oil enjoyed a boost from deeper-than-expected production cuts from Saudi Arabia. Energy commodities were up big this week, overshadowing gains from other commodities like gold and silver.
Weekly Commodity ETF Movers
For ETF investors, we tracked the top three biggest gainers and top three biggest losers for the past week. Not included are ETNs, which behave differently than ETFs, as well as leveraged ETFs which may not be suitable for some investors. Considering the limited data for the year, all ETFs were taken into consideration regardless of YTD gains.
Top Three ETF Winners This Week
| ETF Ticker | ETF Name | Commodity Category | Assets ($ million) | NAV (as of Jan. 16) | Return (weekly %) | Return (YTD %) | Expense Ratio |
|---|---|---|---|---|---|---|---|
| CPER | United States Copper Index Fund | Copper | 5.7 | $17.59 | 6.80% | 7.58% | 0.65% |
| DBB | PowerShares DB Base Metals Fund | Metals | 284.05 | $16.09 | 6.06% | 7.84% | 0.75% |
| UNL | United States 12 Month Natural Gas Fund | Natural Gas | 16.44 | $11.27 | 4.55% | -3.59% | 0.75% |
Copper and other industrial metal ETFs made the list of top performers this week on the back of positive economic data coming from both China and the U.S. Natural gas, unsurprisingly, also made our list after reports of falling reserves.
Top Three ETF Losers This Week
| ETF Ticker | ETF Name | Commodity Category | Assets ($ million) | NAV (as of Jan. 16) | Return (weekly %) | Return (YTD %) | Expense Ratio |
|---|---|---|---|---|---|---|---|
| UHN | United States Diesel Heating Oil Fund | Heating oil | 6.74 | $16.11 | -2.89% | -3.99% | 0.60% |
| OILK | ProShares K1 Free Crude Oil Strategy ETF | Crude oil | 6.72 | $21.82 | -2.72% | -2.59% | 0.65% |
| TAGS | The Teucrium Agricultural Fund | Broad agricultural | 1.32 | $25.84 | -2.67% | 0.62% | 0.49% |
Despite the gains in the underlying commodities this week, both crude oil and heating oil ETFs made our top three losers list for the week. This could stem from a delayed reaction to the sudden swing in investor sentiment. Rounding out the worst performing ETFs is a broad-based agricultural fund as wheat, corn, soybean and cotton struggled against higher production and investor selling pressure.
We provide this report on a weekly basis. Be sure to check our News section to stay updated on the latest happenings in the commodity space.
