FxWirePro Commodities Watch (Softs)

We, at FxWirePro, have been sensing a change in the commodities market for quite some time now. After months and years of battering by traders and investors, since last year, they are once again becoming the darlings. Many of the commodities have risen more than 40 percent last year and that figure in most cases will be much larger if we consider it from the bottoms, which were largely made earlier last year.

In this FxWirePro Commodities Watch, we are to present our readers the performance of the various commodities, categorically classified, which are key to understand the broader global economy. For example, copper is considered as a barometer of global economic activity or gold is considered as a safe haven.

We consider the commodities as a must watch due to their impact on inflation.

Hence, we present to our readers, the performance of commodities, which in turn decide the wellbeing of many commodity-producing nations. For example, Russia, Saudi Arabia, and Qatar benefit from higher oil price. However, we are not restricting ourselves to industrial commodities but to agricultural ones too as they are vital for many economies. The higher price of cotton benefits India, while Coffee and orange juice benefit Brazil.

This group has performed extremely well last year. For example, Sugar price rose more than 60 percent in 2016. And thanks to higher agricultural prices, global food index turned positive for the year 2016.

In this article, we evaluate the YTD performance of soft commodities, which are agricultural.

• The best performer in this pack has been Lumber (17.2 percent), followed by Cotton#2 (1.97 percent), Coffee and Sugar (0.2 percent).
• The other members of the pack haven’t done so well so far this year, despite outperformance last year. Cocoa remains the worst performer with 12.9 percent loss, followed by Orange juice (-7.4 percent).

As a pack, the soft commodity is down by -0.12 percent YTD.