S&P Dow Jones Indices has published the latest Commodities Performance Highlights – June 2019, a monthly note on Commodities updates.
Highlights
- The S&P GSCI was up 4.4% for the month of June and up 13.3% YTD
- The Dow Jones Commodity Index (DJCI) was up 3.1% in June and up 6.9% YTD, reflecting its lower energy weighting
- A recovery in petroleum prices and an impressive rally in gold were the main drivers of the broad commodities indices’ performance over the month.
- Over the first six months of the year, the S&P GSCI Nickel rose an impressive 19.1%. The rally was largely attributed to the long-term prospects for the use of nickel in electric vehicles and falling exchange-held inventories.
- The S&P GSCI Iron Ore moved significantly higher, by 14.9% in June, due to another drop in port inventories and additional Chinese government stimulus.
- The other metal to record double digit percentage gains was the S&P GSCI Palladium, which jumped 15.7% in June due largely to investor demand and is now close to reaching an all-time high.
- The S&P GSCI Agriculture ended the month up only 0.3%, with some of the recent weather-induced exuberance taken out of the grains market on the last day of the month, following the release of the USDA’s Acreage Report.
- The S&P GSCI Gold increased 8.0% for the month.
Fiona Boal, Head of Commodities and Real Assets at S&P Dow Jones Indices comments: “The exhilaration that was associated with the strength of the global economy a year ago has been replaced with growing financial market turbulence, a plethora of geopolitical flashpoints, and a string of economic releases that have fallen short of expectations. It would appear that few central banks wish to find themselves on the wrong side of the U.S. Fed, suggesting that lower interest rates are on the horizon. Gold tends to perform well in these circumstances.”
The rollercoaster ride continued in the lean hogs market, with the S&P GSCI Lean Hogs down 10.0% in June. The latest U.S. hogs and pigs report indicates that pig and pork supplies in 2019 will be well above last year’s levels. The June 2019 hog inventory was up 4% year-over-year and the breeding herd expanded by 1%. This is the highest June 1 inventory of all hogs and pigs in the U.S. since estimates began over 50 years ago. At the same time, U.S. pork exports to China have been lacklustre due to the ongoing trade spat between the two nations, and despite the devastation caused to the Chinese domestic industry by African swine flu.
