S&P: Commodities up in 2016

By Jodie Gunzberg, global head of Commodities and Real Assets, S&P Dow Jones Indices

As February comes to an end, so might be the commodity catastrophe.

Although the S&P GSCI Total Return lost another 3.2% in the month (through Feb. 26, 2015,) bringing the year-to-date performance down to -8.2%, half of the 24 commodities in the index were positive for the month.

Further, at least one commodity from each sector gained in February, and the majority of sectors, 3 of 5, were positive for the month.

The S&P GSCI Precious Metals continue to lead in 2016, adding 8.7% in Feb., for a YTD gain of 14.2%. This is from gold’s gain of 15.1% YTD, making it the best performing commodity in the index for the year, and also for the month, up 9.3% in Feb.

However, it’s not the best performing commodity for the month by much with zinc adding 8.1% and sugar up 7.2%.

Zinc’s gain contributed to the positive performance of 3.1% in industrial metals for the month plus all the constituents in the sector gained except nickel.

There is tightening supply in the metals, especially in zinc, copper and lead, with the latter two, showing positive roll yields in February.

All three commodities in livestock were also positive in the month for a sector return of 1.5% MTD.

Inventory increases in lean hogs reduced their monthly gain to just 24 basis points but the commodity is still posting a YTD gain of 8.7%, making it the third best performer of all the commodities in 2016 – only behind gold and zinc.

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