First Quarter Commodity Trading Performance

| March 30, 2015 | 0 Comments

commoditiesQ1 Commodity Trading Performance

Believe it or not, the first quarter of 2015 is drawing to a close.  I don’t know about you, but it just seems like yesterday we were celebrating the arrival of a New Year.  As they say, time flies when you’re having fun!

Speaking of fun, there’s one asset class that’s not having any of it… commodities.

Commodity trading performance was dismal in the first quarter of 2015.  In fact, now’s the perfect time to recap individual commodity performance from the past three months.

But first, let’s look at how commodities performed overall…

commodity trading performance, a CRB index chart

As you can see, the Reuters/Jeffries CRB index suffered a 6.7% loss on the quarter.  At one point, the CRB was down a whopping 11% before a recent rally in oil prices brought some relief to the beleaguered asset class.

To understand why the CRB performed so poorly, let’s look at the biggest commodity winners and loser in the first quarter of 2015.

First the top performers…

Feeder Cattle

With the high demand summer grilling season just around the corner, investors are pushing feeder cattle back towards the all-time highs set in November 2014.  Feeders gained 6.8% on the quarter, jumping to $2.18 a pound.  Live cattle followed closely behind with a gain of 3.8%.

Silver 

No doubt about it, silver investors went for quite a roller coaster ride in the first quarter.

The lustrous metal jumped out of the gate with strong gains in January, only to succumb to another downturn in February and early March.  But when Federal Reserve Chairwoman Janet Yellen announced the US central bank would be slow to raise interest rates, investors found a new interest in the metal.

Silver looks to close the quarter at $17.00 an ounce, a 5.2% gain on the quarter.

Cotton 

The essential fiber made out with a small gain of 3.2% on the quarter.  Investors are likely speculating this year’s cotton crop will be smaller than years past due to farmers unwillingness to plant due to low prices.

As you can see, the list of commodity advancers in Q1 2015 is rather short.  What’s more, the gains experienced by feeder cattle, silver, and cotton are relatively small compared to the losers you’ll see below. 

And that’s precisely why the CRB index performed so poorly this quarter.

Here’s a look at some of the biggest losers over the past three months…

Lean Hogs

This commodity was the worst performer of the first quarter with a 28% loss.

What happened?

As you may remember, lean hogs surged to multi-year highs in early 2014 as the porcine epidemic diahorrea virus (PEDv) decimated the US hog population.  But this winter’s PEDv losses were much less than feared.  As a result, investors are sending the commodity back to multi-year lows at $0.60 a pound. 

Coffee 

Here’s another commodity that went nuts in early 2014, only to suffer heavy losses in early 2015.  Coffee ended the quarter down 19.4% due to the arrival of much-needed rains in the world’s largest producer, Brazil.

Natural Gas

Despite a brutal winter in the Central and Eastern US, natural gas sank to multi-year lows near $2.60 mmBtu- a 13.6% quarterly downturn.  Even though demand for the commodity was high this winter, producers kept the market well supplied.

Crude Oil 

Without question, crude is the most talked about commodity amongst investors lately.  The 2014 downturn was the most surprising and abrupt market price adjustment I’ve seen in quite some time.  The 2014 selling leaked into the first quarter of 2015 as crude shed another 13.2%.

Palladium 

Despite an expected global palladium supply shortfall in 2015, the metal sank to multi-month lows under $750 an ounce in recent trading.  Palladium was the worst performing precious metal of all with a loss of 9.7% on the quarter.

Rounding out the top commodity losers in the first quarter are soybeans, wheat, and sugar- all with losses exceeding 8%. 

There you have it… 

It was clearly another rough quarter for commodities.  However, there are a few glimmers of hope for commodity bulls as some assets are trading at prices that make profitable production very challenging.

Stay tuned to Commodity Trading Research to discover which commodities are the most likely to rally in 2015 and beyond. 

Until Next Time,

Justin Bennett

BIO:  Justin Bennett is the head commodity research analyst at Commoditytradingresearch.com.  With over a decade of real world trading experience, he finds ways for you to consistently profit from movements in commodities and the companies producing them.  Sign up for our free reports and commodity newsletter at https://commoditytradingresearch.com/free-sign-up.

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Category: Commodity Trading

About the Author ()

Justin Bennett is the editor of Commodity ETF Alert, an investment advisory focused on profiting from the ebb and flow of important commodities via ETFs. The commodity veteran and options specialist is also a regular contributor to the Dynamic Wealth Report. Every week, Justin shares his thoughts with our readers on a variety of commodity-related topics. Justin is also a frequent contributor to Commodity Trading Research’s free daily e-letter. And he’s the editor of another highly successful and popular investment advisory, the Options Profit Pipeline.

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