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Contango Reports

Contango Report: Backwardation Fuels BNO
By Sumit Roy | September 17, 2012

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Featured Commodity

CONTANGO WATCH: Brent's backwardation widened slightly last week. The European oil benchmark has been in steady backwardation since the beginning of 2011, boosting investor returns. In that period, front-month Brent futures are up 22 percent, while the United States Brent Oil Fund (BNO)—which holds front-month futures but must roll its contracts month after month—is up 32 percent.

As long as the Brent forward curve remains in backwardation, a fund like BNO should outperform Brent itself.

ROLL COSTS: Investors net 5.42 percent annualized from rolling front-month Brent contracts.

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 September 14, 2012
Data courtesy IndexUniverse.com

Energy

Agricultural Commodities

 

Precious Metals

 

Soft Commodities

Industrial Metals

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Current Roll Previous Week's Roll Past Year Average Roll Historical 09/14 5YR Annualized Roll
Energy WTI 3.70% 4.32% 0.30% 6.50%
Brent -5.42% -4.61% -0.62% 2.59%
HH Natural Gas 79.59% 90.87% 3.23% 546.42%
Precious Metals Gold 0.95% 1.01% 0.12% 1.15%
Silver -4.74% 3.85% 0.14% 0.24%
Platinum 0.66% 0.38% 0.26% 1.47%
Palladium 4.43% -4.16% 0.25% 1.76%
Industrial Metals Copper 0.79% 0.38% 0.01% -0.08%
Aluminum 8.28% 8.22% 0.52% 7.28%
Zinc 7.69% 5.82% 0.13% 5.06%
Lead 2.54% 3.20% 0.26% 2.86%
Nickel 0.88% 1.62% 0.10% 0.78%
Tin -0.83% 0.00% 0.05% -2.58%
Agricultural Commodities Corn 2.10% 1.51% -1.17% 10.63%
Wheat 5.16% 4.70% 2.49% 14.80%
Soybeans 0.62% -0.17% -0.15% 4.54%
Live Cattle 14.37% 13.51% 1.13% 7.64%
Lean Hogs -1.01% -6.94% 0.62% -14.53%
Soft Commodities Coffee C 8.58% 8.28% 1.05% 7.09%
Cocoa 2.17% 0.92% 0.81% 3.15%
Sugar #11 9.50% 6.38% -1.14% 8.60%
Cotton #2 3.66% 3.70% -0.31% 10.68%



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