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Featured Commodity
CONTANGO WATCH: Following the official announcement of the Ukrainian ban on wheat exports, wheat's contango continued to steepen last week, rising almost 2 percent. The U.S. Department of Agriculture reported lower-than-expected export sales of corn and soybeans, while wheat exports beat estimates. This favorable sign bled over into optimism in the demand for Black Sea exports, which had boosted the price of futures this past week, though not enough to take wheat out of its well-established range between $8.50 to $9 a bushel.
"The Ukrainian export ban is supportive for wheat but it had been widely expected and priced into the market so the price impact is relatively modest," said Rabobank Analyst Erin FitzPatrick. "But the decision will reduce the possibility that more Black Sea region wheat will come into the export sector for the rest of this marketing year."
In response, grain-based commodity ETFs saw a tidy little return, with both the iPath Pure Beta Grains ETN (NYSE Arca: WEET) and Teucrium Wheat (NYSE Arca: WEAT) making the Commodity Flows Top 5 Weekly Performers chart, netting returns of 3.26 percent and 1.82 percent, respectively. These funds may be the ones to watch as the ban come into effect.
ROLL COSTS: Wheat's annualized front-month roll costs rose from 5.09 percent to 6.97 percent.
BOTTOM LINE: Contango
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 (Nov 12- Dec 12) for each of our selected commodities, please select a sector or commodity below (or read the whole report):
Data as of close on October 26, 2012
Data courtesy IndexUniverse.com
Energy
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Agricultural Commodities
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Precious Metals
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Soft Commodities
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Industrial Metals
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Current Roll |
Previous Week's Roll |
Past Year Average Roll |
Historical 10/26 5YR Annualized Roll |
| Energy |
WTI |
7.37% |
5.59% |
0.33% |
7.27% |
| Brent |
-11.85% |
-7.56% |
-0.53% |
6.04% |
| HH Natural Gas |
218.01% |
172.09% |
3.53% |
223.55% |
| Precious Metals |
Gold |
0.42% |
0.73% |
0.13% |
0.89% |
| Silver |
3.65% |
3.79% |
0.14% |
1.51% |
| Platinum |
0.76% |
1.35% |
0.25% |
1.40% |
| Palladium |
4.54% |
3.89% |
0.25% |
2.55% |
| Industrial Metals |
Copper |
-0.38% |
0.07% |
-0.01% |
0.80% |
| Aluminum |
8.16% |
7.92% |
0.53% |
8.00% |
| Zinc |
8.27% |
8.55% |
0.16% |
5.41% |
| Lead |
-3.51% |
0.00% |
0.27% |
3.09% |
| Nickel |
1.36% |
1.50% |
0.10% |
2.23% |
| Tin |
0.00% |
-1.40% |
0.04% |
-3.71% |
| Agricultural Commodities |
Corn |
1.08% |
-1.17% |
-1.37% |
10.01% |
| Wheat |
6.97% |
5.09% |
2.00% |
17.59% |
| Soybeans |
0.68% |
0.87% |
-0.24% |
3.01% |
| Live Cattle |
20.34% |
18.90% |
1.28% |
12.46% |
| Lean Hogs |
50.36% |
55.45% |
1.06% |
64.08% |
| Soft Commodities |
Coffee C |
11.43% |
10.74% |
1.20% |
9.77% |
| Cocoa |
1.86% |
1.46% |
0.71% |
3.73% |
| Sugar #11 |
-2.45% |
-2.94% |
-0.60% |
-11.71% |
| Cotton #2 |
2.67% |
-9.28% |
-0.17% |
8.26% |
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