Contango Report: NatGas Clings To Contango
By Sumit Roy | August 06, 2012

Related ETFs: UNG

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[This article previously appeared on HardAssetsInvestor.com and is republished here with permission.]

Featured Commodity

CONTANGO WATCH: Natural gas remained in backwardation for a third week amid scorching summer temperatures across the United States. For the next month or two, roll costs should not be a major consideration for natural gas traders.

That means that at least in the short term, front- month futures-based exchange-traded products such as the United States Natural Gas Fund (NYSE Arca: UNG), offer traders relatively undiluted exposure to movements in gas prices.

In other words, if natural gas continues to rally from here, holders of UNG should be able to capture most, if not all, of those gains.

ROLL COSTS: Investors net 4.56 percent annualized from rolling front-month natural gas contracts, up from a net of 2.55 percent.

BOTTOM LINE: Backwardation

Has oil moved into backwardation yet? What does corn's roll yield look like? How do you know when it's time to buy—or sell?

Each week, we investigate the futures curves of the most important commodities in the U.S., helping investors better understand the market and seize buy-and-sell opportunities as soon as they arise. For an easy-to-understand explanation of contango, backwardation and roll yields, please click here to go to our Hard Assets University.

To see current contango curve and front-month roll costs for each of our selected commodities, please select a sector or commodity below (or read the whole report ):

Data as of close on July 20, 2012
Data courtesy IndexUniverse.com

Energy

Agricultural Commodities

Precious Metals

Soft Commodities

Industrial Metals

.

		Current Roll	Previous Week's Roll	Past Year Average Roll	Historical 07/20 5YR Annualized Roll
Energy	WTI	3.98%	5.49%	0.30%	8.51%
	Brent	-8.56%	-10.19%	-0.57%	3.98%
	HH Natural Gas	-4.56%	-2.55%	3.03%	10.57%
Precious Metals	Gold	0.99%	0.79%	0.12%	1.29%
	Silver	1.12%	0.07%	0.12%	1.45%
	Platinum	-4.04%	-3.31%	0.25%	-0.42%
	Palladium	0.70%	0.45%	0.24%	1.46%
Industrial Metals	Copper	0.32%	-0.23%	-0.00%	-1.12%
	Aluminum	9.47%	9.08%	0.55%	5.48%
	Zinc	0.98%	-0.64%	0.12%	4.65%
	Lead	2.56%	1.29%	0.21%	3.77%
	Nickel	1.29%	1.35%	0.09%	1.83%
	Tin	0.19%	0.64%	0.07%	0.56%
Agricultural Commodities	Corn	-13.48%	0.13%	-1.01%	4.53%
	Wheat	3.07%	7.25%	2.70%	16.63%
	Soybeans	-28.55%	-15.23%	0.10%	-24.21%
	Live Cattle	28.88%	21.95%	0.88%	34.23%
	Lean Hogs	-63.29%	-54.36%	0.75%	-39.58%
Soft Commodities	Coffee C	5.17%	8.01%	1.00%	7.00%
	Cocoa	2.70%	2.96%	1.01%	2.74%
	Sugar #11	0.40%	5.12%	-2.13%	9.39%
	Cotton #2	9.14%	9.24%	-0.47%	4.13%