We have all heard the headline reports about energy prices skyrocketing in 2008, but what have the other commodities been doing in terms of percentage returns? Let’s take a quick look at Agriculture, Metals, Energy, Livestock, and the CRB Index for their standing now that half of the year has passed.
Commodity Percentage returns so far in 2008:
Line Graph showing monthly progression for 2008:
It’s no surprise that energy prices are up over 50% for the year, and that broader commodities are up as well.
If these trends should continue (and that is a big “if”), we could see energy prices up by 100% per year and the other major commodities up around 30% for the year. I suspect the Federal Reserve will attempt to step in through raising interest rates, as many have speculated, before this scenario becomes a reality.
Nevertheless, commodities experienced a decent surge (some over 30%) in the first three months of 2008 before falling as the Stock Market ‘bottomed’ in March. Money flowed back into stocks until late May, while the price of energy (mostly driven by crude oil) climbed almost non-stop for the year so far.
Continue to keep your eye on these broader based commodities, and the division between them for clues on what may be happening beneath the surface (yes, there are many other commodities other than crude oil).