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ELEMENTS S&P Commodity Trends Indicator ETN (LSC)

  • Dec. 26, 2012, 4:14 PM
    Corn has delivered the best 2012 performance of ten major commodities tracked by Bespoke: buoyed by strong Asian demand, its price has risen 17.3% YTD. Coffee has delivered the worst performance, declining 34.8% - expect that drop to provide a nice 2013 lift to the margins of SBUX, DNKN, and other coffee chains, as it becomes reflected in new contract prices. Oil is down 8%, its first annual decline since '08. 7 of the 10 tracked commodities are up on the year.
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  • Dec. 6, 2012, 4:44 PM
    The commodity super cycle has entered has entered a "renaissance" period, says Goldman, in which prices may not go a lot higher, but markets in "backwardation" - near-term prices greater than those further out - will create the opportunity for "significant investment returns."
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  • Dec. 4, 2012, 5:57 PM
    Phosphorus: The finite supply of it is why Jeremy Grantham predicts a grim future for much of the world's population. As production of the critical ingredient for fertilizer drops, so will crop yields, which will threaten the ability to feed the world's population. Grantham thinks the finite supply of fertilizer and limits of crop yields already are starting to affect food prices.
  • Dec. 3, 2012, 4:57 PM
    The commodity supercycle isn't over yet, writes Ambrose Evans-Pritchard, pointing to a contrarian RBA study arguing China's heavy consumption of key metals and oil is just getting underway. Consider how well the prices of these commodities have held up in 2012 despite slumping worldwide growth, especially in China. Toss in central banks printing away ... do you really want to sell commodities now? DBC +5% YTD.
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  • Nov. 19, 2012, 11:33 AM
    The commodity super cycle is over," says Ed Morse, head of commodity research for Citigroup, and even heavy central bank printing isn't bringing it back. "No longer will a pure long-only strategy bring in the returns expected in 2002-08. Nor will conditions approximating those of the last decade return any time soon." DBC +2.4% Y/Y.
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  • Nov. 16, 2012, 9:32 AM
    Industrial metals prices are set to rally into the middle of 2013, says Westpac's Justin Smirk, who has the hottest hand in forecasting of late. He's keeping it simple: Easy money in the U.S. and Europe will combine with a rebounding Chinese economy. Copper, zinc, nickel, and aluminum are all headed higher.
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  • Nov. 12, 2012, 9:00 AM
    Likely settling approximately nothing, the SEC finds ETPs which hold physical metal have no impact on the actual price of the commodity. The finding comes as the agency examines the possible effects of proposed physical copper ETFs from JPMorgan and BlackRock.
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  • Nov. 5, 2012, 2:20 PM
    If you want to invest in commodities, writes Josh Brown, do you buy the physical (through an ETF) or the producers? His preference is the physical as the producers can often be counted on to issue secondaries or grant massive stock options just at the time when a bull market makes things fun (sounds familiar to fans of gold miners).
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  • Oct. 25, 2012, 11:04 AM
    Commodity investors will have interest in a comparison of the Rogers Commodity ETN (RJA) vs. the much more popular DB Agriculture ETF (DBA). RJA offers diversity, investing over a far wider range of contracts than DBA, which has 72% of its assets in just its top 6 holdings. Performance: Rogers dominates by 1400 basis points over 3 years, but DBA by about 700 basis points over 5 years.
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  • Sep. 21, 2012, 12:41 PM
    An outstanding set of charts (I, II, III) from Deutsche (h/t MicroFundy) tracks the S&P, CRB, and the dollar index before and after the Fed's (now 3) QE programs. If it's true - as the charts suggest - that the effect of the drug wears off with each successive application, stocks, commodities, and currencies may not have much more in gains ahead of them.
  • Sep. 11, 2012, 3:38 PM
    No longer trendy, commodities have fallen out of favor at several large public pension funds. The $36B Illinois Teachers' Retirement System scrapped its 4 year program, instead putting the money into areas better reflecting "conditions in the world economy." CalSTRS ($150B AUM) remains nominally committed, but at $150M, the amount in commodities is less than the fund's operating budget.
  • Sep. 3, 2012, 9:35 AM
    In the case of commodities, what goes up must come down, suggests FT Alphaville's Neil Hume, who wonders what this up-and-away chart would have looked like without the threat of Iran and the fervor of gold bugs.
  • Aug. 28, 2012, 5:06 PM
    Commodity prices have only begun to drop, writes Michael Pettis (not yet available on web), attributing nearly the entirety of increased demand over the past decade to "incredibly unbalanced growth" in China (now coming to an end). Recently, it's gotten even more unwholesome, with much of Chinese demand going to build mountains of inventory. Expect the country to soon become a net seller of a number of commodities.
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  • Aug. 2, 2012, 7:28 AM
    BHP Billiton is set to postpone a $20B port expansion plan in Australia, according to a memo from the company's iron ore chief: The resources industry is "facing numerous challenges including substantial capital and operating cost escalation and decreasing commodity prices." Mining contractors in Perth have reportedly already started laying off workers.
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  • Aug. 1, 2012, 8:18 AM
    A revision to the mean type of guy for most of his career, Jeremy Grantham continues a Malthusian turn in his old age, warning of decades of food shortages (last year's warning focused on metals, but all of a sudden the world seems oversupplied with those). Being a breadbasket, the U.S. will not be affected too badly, but poorer importers will see trouble.
  • Jul. 18, 2012, 12:10 PM
    Harvard is taking a shine to natural resources - particularly timber (WOOD, CUT) - maybe at the expense of private equity and hedge funds, according to the normally secretive endowment chief Jane Mendillo. Of distressed credit in Europe, she's interested, but notes it's the hot new investment area and will take a pass for now.
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LSC Description
CTI ELEMENTS are designed to track the performance of the S&P Commodity Trends Indicator - Total Return. The index is comprised of 16 commodity futures contracts divided among six commodity sectors. The Index is designed to capture trends within commodity markets by setting its sector groupings long or short each month based on price signals.
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