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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 U.S.’s most important commodities, helping investors better understand the market and seize buy-and-sell opportunities as soon as they arise.

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


Data from March 14 to March 18, 2011
Data courtesy IndexUniverse.com

Energy

Agricultural Commodities

Precious Metals

Soft Commodities

Industrial Metals

Energy

NYMEX WTI Crude Oil


WTI Crude

(Click to enlarge)

CONTANGO WATCH: The one-year WTI Crude Oil forward curve flattened on the front end and moved into backwardation on the back end—a favorable shift for investors.

ROLL COSTS: Front month roll costs decreased to their lowest level in weeks in response to the curve’s shift, with investors now paying the equivalent of less than one percent per month.

BOTTOM LINE: Contango to Backwardation

ICE Brent Crude Oil


Brent Crude

(Click to enlarge)

CONTANGO WATCH: This week, the Brent oil forward curve moved back into steady backwardation.

ROLL COSTS: Investors net almost two percent annualized by rolling front month Brent contracts.

BOTTOM LINE: Backwardation

NYMEX Henry Hub Natural Gas


H H Nymex natural Gas

(Click to enlarge)

CONTANGO WATCH: As natural gas prices rallied last week, the Henry Hub forward curve steepened.

ROLL COSTS: Annualized roll costs may have increased, but they remain modest both on a historical basis and relative to gas’s volatility. The roll steepens when you move into the winter months, however.

BOTTOM LINE: Steepening Contango

Precious Metals

COMEX Gold


Comex Gold

(Click to enlarge)

CONTANGO WATCH: The gold curve remains well-behaved in modest contango.

ROLL COSTS: Annualized front month roll costs are almost 1.5 percent, in the middle of gold’s 52-week range.

BOTTOM LINE: Mild Contango

COMEX Silver


Comex Silver

(Click to enlarge)

CONTANGO WATCH:The silver forward curve steepened notably on the very front end.

ROLL COSTS: Annualized roll costs jumped to just short of 3.75 percent, which is five times last week’s level.

BOTTOM LINE: Choppy Contango

NYMEX Platinum


Nymex Platinum

(Click to enlarge)

CONTANGO WATCH: The platinum forward curve remains in steady contango over the next year.

ROLL COSTS: Investors pay about 2.5 percent annualized to roll their front month platinum contracts.

BOTTOM LINE: Mild Contango

NYMEX Palladium


Nymex Palladium

(Click to enlarge)

CONTANGO WATCH: The March-June palladium spread remains in backwardation, but only just barely.

ROLL COSTS: Investors still gain by rolling front month palladium contracts, but by much less than they did last week.

BOTTOM LINE: Backwardation to Contango

Industrial Metals


LME Copper


LME Copper

(Click to enlarge)

CONTANGO WATCH: The copper forward curve flattened this week, showing no noticeable contango evident in the next three contracts.

ROLL COSTS: Front month roll costs for decreased to just 0.28 percent from almost one percent last week.

BOTTOM LINE: Mild Contango to Backwardation

LME Aluminum


LME Aluminum

(Click to enlarge)

CONTANGO WATCH: The aluminum forward curve remains in steady, consistent contango.

ROLL COSTS: Front month roll costs were flat for a second week at 4.77 percent.

BOTTOM LINE: Steady Contango

LME Zinc


LME Zinc

(Click to enlarge)

CONTANGO WATCH: Like aluminum, zinc remains in steady contango through its entire forward curve.

ROLL COSTS: Zinc roll costs edged higher over the past week by about one percent, but remain relatively modest.

BOTTOM LINE: Steady Contango

LME Lead


LME Lead

(Click to enlarge)

CONTANGO WATCH: Lead is back in steady backwardation throughout its one-year forward curve.

ROLL COSTS: Investors net a solid 4.4 percent rolling front month lead contracts, though that’s less than they might have earned last week.

BOTTOM LINE: Steady Backwardation

LME Nickel


LME Nickel

(Click to enlarge)

CONTANGO WATCH:The nickel forward curve remains virtually flat before shifting to steady backwardation after August.

ROLL COSTS: Investors neither pay nor gain by rolling front month nickel contracts, making them a pure price play.

BOTTOM LINE: Flat to Backwardation

LME Tin


LME Tin

(Click to enlarge)

CONTANGO WATCH:Tin is now in steady backwardation throughout its one-year forward curve, a notable shift from last week.

ROLL COSTS: Investors now net 0.2 percent annualized on the tin roll, a slight improvement from last week’s 0.6 percent cost.

BOTTOM LINE: Backwardation

Agricultural Commodities


CBOT Corn


CBOT Corn

(Click to enlarge)

CONTANGO WATCH:Corn’s forward curve features contango at the very front end, backwardation in the middle, and then contango once again.

ROLL COSTS: After last week’s significant price volatility, corn’s annualized front-month roll cost increased noticably to 12 percent.

BOTTOM LINE: Contango to Backwardation

CBOT Wheat


CBOT Wheat

(Click to enlarge)

CONTANGO WATCH: The wheat forward curve steepened significant on the front end.

ROLL COSTS: Wheat’s annualized front-month roll cost spiked dramatically after last week’s extremely volatile trading.

BOTTOM LINE: Steep Contango

CBOT Soybeans


CBOT Soybeans

(Click to enlarge)

CONTANGO WATCH: Soybeans remain in contango through July before moving into backwardation.

ROLL COSTS: While soybean roll costs did increase last week, the move was modest relative to those of corn and wheat.

BOTTOM LINE: Contango to Backwardation

CME Live Cattle


CME Live Cattle

(Click to enlarge)

CONTANGO WATCH: The very front of the live cattle curve remains flat, but then it shifts into steep seasonal contango thereafter.

ROLL COSTS: Front month roll costs edged into positive territory, but look for rolls to get much bigger in the near future.

BOTTOM LINE: Humpbacked Contango

CME Lean Hogs


CME Lean Hogs

(Click to enlarge)

CONTANGO WATCH: Unsurprisingly, lean Hogs remain in steep seasonal contango.

ROLL COSTS: Lean hogs’ annualized roll, while steep now, should level off in the coming weeks.

BOTTOM LINE: Humpbacked Seasonal Contango

Soft Commodities


ICE Coffee


ICE Coffee

(Click to enlarge)

CONTANGO WATCH: The very front end of the coffee forward curve has moved into backwardation, but the rest of the curve remains similar to last week.

ROLL COSTS: Annualized front-month roll costs for coffee moved into negative territory, with investors now netting almost 1.3 percent annualized from rolling front month contracts.

BOTTOM LINE: Humpbacked Contango

ICE Cocoa


ICE Cocoa

(Click to enlarge)

CONTANGO WATCH: The cocoa forward curve shifted significantly this past week, moving from backwardation to mild contango.

ROLL COSTS: Investors now have to pay about 1.6 percent to roll front month cocoa contracts, a notable shift from the past few weeks.

BOTTOM LINE: Mild Contango

ICE Sugar #11


ICE Sugar

(Click to enlarge)

CONTANGO WATCH: The sugar forward curve continues to exhibit extremely steep backwardation, rivaled only by cotton.

ROLL COSTS: Little has changed over the past several weeks, as investors continue to net very attractive positive roll yields from holding sugar contracts.

BOTTOM LINE: Steep Backwardation

ICE Cotton #2


ICE Cotton

(Click to enlarge)

CONTANGO WATCH:For cotton futures, the steepest part of the curve remains between July and December.

ROLL COSTS: Cotton’s positive annualized roll yield may have fallen slightly to 45 percent, but remains steep – and attractive -- by any measure.

BOTTOM LINE: Steep Backwardation

Source: The Contango Report: Wheat's Contango Grows Significantly