FxWirePro Commodities Watch (Grains and Oilseeds):

Understanding commodities are vital to gauge the performance of other asset classes such as bonds, equities, and even currencies. Since, 2014, any regular follower of financial markets would be able to recall that how devastating the drop in oil prices has been for many countries like Russia, Brazil, and Malaysia whereas net importer of oil like India has largely benefitted from it. Hence, it is of utmost importance to investors to keep a tab on the trends in the commodities market.

Historically speaking, a rise in commodity prices has triggered a vicious chain reaction. First, the prices of commodities go up, which in turn triggers a rise in inflation, which again has historically triggered selloffs in bonds, which has not been good for equities in some cases.

In this Commodities Watch, we present to our readers, the performance of commodities, which in turn decide the wellbeing of many commodity producing and consuming nations. For example, the price of Cocoa is extremely important for Ivory Coast, which is biggest supplier of the commodity.

In this article, we evaluate the YTD performance of the grains and oilseeds, which are consumer by almost the entire world.

• The best performer of this pack so far is Soybeans (17.3 percent), thanks to very high demand from China and other emerging economies.
• Canola oil has reversed its losses for the year in past months and now up 11 percent YTD.
• Other members haven’t done so well. The worst performer has been Wheat (-18.4 percent), followed by Rough rice (-17.9 percent).
• The last time we reviewed Oats was down almost 6 percent, but now it is up by 1.25 percent YTD.
• Corn is down (-3.7 percent YTD) so far this year.

As a pack, it has been only marginally down (-1.7 percent).