Commodities Increased in April due to Positive Fundamental Factors
Consider this article for it might prove to be interesting; a small excerpt is posted below.
The next bullish MACD crossover is most likely going to lead to a very strong breakout. If the current pattern strengthens or remains unchanged, then copper should be trading north of 4.20 within the next 9-12 months and possibly as high as 5.10.
These two leading economic indicators were dead for a long time, but they are now issuing bullish signals, and this indicates that our original upside targets of 30K might be too conservative. However, before we start issuing higher targets, let’s see how the Dow reacts when it gets to 29K. Leading Economic Indicators: Finally in Sync With The Stock Market?
NEW YORK, May 11, 2016 /PRNewswire/ — Commodities increased in April, driven by positive supply factors and macroeconomic events, according to Credit Suisse Asset Management.
The Bloomberg Commodity Index Total Return performance was positive for the month, with 18 out of 22 Index constituents posting gains.
Credit Suisse Asset Management observed the following:
Energy was the best performing sector, up 13.43%, led by Brent and WTI Crude Oil. Although the April 17th OPEC meeting in Doha did not result in an output freeze, production outages in Kuwait, Nigeria and Venezuela, and U.S. production cuts, reduced supply expectations. The U.S. Energy Information Administration reported that domestic crude oil production fell for the eighth consecutive week.
Precious Metals gained 7.26%, led by Silver, amid a weakening U.S. Dollar after the U.S. Federal Reserve left interest rates unchanged. The Bank of Japan surprised markets by holding off on additional stimulus measures, strengthening the Japanese Yen versus the Dollar.
Industrial Metals increased 7.18%, led by Nickel, as positive Chinese economic data, including better-than-expected industrial production figures, signaled that central bank stimulus may be working, supporting base metals demand expectations.
Agriculture gained 7.03%, led by Soybean Meal, as excessive heavy rains in Argentina caused the harvest to be significantly delayed, reducing the production outlook for soybean meal and soybeans. Expectations for continued strong demand out of China were also supportive.
Livestock was the worst performing sector, down 3.47%, led by Live Cattle, as the U.S. Department of Agriculture reported Full Story
Commodities Increased in March due to Positive Fundamental Factors
NEW YORK, April 11, 2016 /PRNewswire/ — Commodities increased in March, largely driven by decreasing supply expectations and weather fundamentals supporting the energy and agriculture sectors, according to Credit Suisse Asset Management.
The Bloomberg Commodity Index Total Return performance was positive for the month, with 17 out of 22 Index constituents posting gains.
Credit Suisse Asset Management observed the following:
- Energy was the best performing sector, up 7.84%, led by Brent Crude Oil, due to reports of an upcoming meeting in April among OPEC and non-OPEC nations to discuss a potential cap on production. Natural Gas increased due to continued production declines, which helped improve the outlook for the supply and demand balance. In addition, an unusual cold snap in the U.S. Northeast at the beginning of spring improved demand expectations.
- Agriculture increased 4.44% with Soybean Oil gaining the most due to increased demand expectations out of China amid tightening supplies of vegetable oils. Soft commodities also rallied due to disruptive weather conditions resulting from El Niño and a stronger Brazilian Real versus the U.S. Dollar.
- Precious Metals ended the month 0.98% higher, with both Gold and Silver posting positive returns, as demand increased amid concerns over global economic growth. Dovish comments from the U.S. Federal Reserve reaffirmed that they would take a gradual approach to raising interest rates, which weakened the U.S. Dollar.
- Industrial Metals gained 0.38% for the period, led by Zinc, with indications of tightening supply after the International Lead and Zinc Study Group reported that output declined in January as large mining companies have continued to cut production.
- Livestock was the worst performing sector, down 1.10%, led lower by Live Cattle as the U.S. Department of Agriculture reported higher beef production toward the end of the month compared to the same period last year.
Nelson Louie, Global Head of Commodities for Credit Suisse Asset Management, said: “March was a strong month for commodities, with the main focus on the Energy sector. Although U.S. crude oil production declined as companies continued to cut capital expenditures, inventories remained oversupplied relative to the five-year seasonal average for this time of year. If low oil prices persist, gasoline consumption may increase.
Elasticity of gasoline demand amid lower prices was a positive driver within energy last year. Although several oil producers are scheduled to discuss a potential freeze in output later this month, a cap may not be impactful given that among the participants, many are already producing at high levels and others are unlikely to agree. Several geopolitical events impacted oil infrastructure, including disruptions to pipelines in Nigeria and Iraq. Any uptick in geopolitical risk among OPEC countries may help to tighten supplies.” Full Story
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