At Least Commodity Investors Have the Weather

While most raw materials are mired in bear markets, from oil to nickel to corn, cold spells and droughts are fueling a few rallies. The promise of a deep freeze last week in the U.S. sent natural-gas futures to their biggest gain in 11 months. Dry weather in Brazil, the top grower of coffee and sugar cane, sparked advances for both crops. Unusually heavy monsoon rains in Malaysia sent palm oil to the highest since July.

“The weather is always unpredictable and a wild card,” Donald Selkin, the chief market strategist at New York-based National Securities Corp., which oversees $3 billion, said in a telephone interview Jan. 16. “These products are marching to their own tune — for now.”

Just six of 22 raw materials in the Bloomberg Commodity Index are up this month, with four of them weather rallies. Silver and gold were driven higher by economic turmoil in Europe. Overall, January has been a continuation of what was a bad 2014 for commodities as crude, wheat and copper led the index down 17 percent in the past year, touching a 12-year low on Jan. 14. Investors reduced their holdings in raw-material assets in November to the lowest since 2010, Barclays Plc said.

Bloomberg

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