Commodities fell to a six-month low, erasing almost all of this year’s gains, as oil and grains declined on signs of ample supplies and slower economic growth in China, the biggest consumer of industrial metals and energy.
The Bloomberg Commodity Index of 22 raw materials dropped 0.2 percent to 126.001 by 12:11 p.m. in London, after falling to the lowest since Feb. 3 and trimming this year’s advance to 0.2 percent. Soybean oil, lean hogs and Brent crude fell at least 0.7 percent today.
Cotton, grains and oilseeds are the worst-performing commodities this year in the Bloomberg index. Soybeans dropped 19 percent and corn lost 13 percent on record U.S. harvests. Brent is heading for a second monthly decline, the longest streak since May 2013, as shale fracking allowed the U.S. to pump the most oil in 27 years even as fighting in the Middle East threatened to disrupt supplies.
“Perfect growing conditions in Europe, the Black Sea and the U.S. have sent grains down,” said Ole Hansen, head of commodity strategy at Saxo Bank A/S in Copenhagen. “The energy sector has become more robust. This is not least due to the continued rise in non-OPEC production, especially in the U.S.”