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A Quiet End To A Strong Quarter For Commodities

Apr. 02, 2021 1:31 PM ET3 Comments
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  • Despite giving up some of its recent gains in March, the S&P GSCI rose 13.5% in Q1 2021.
  • Corn ended the quarter at the highest level since June 2013.
  • In the softs market, the S&P GSCI Sugar gave up all of its YTD gains in March, falling 10.2% over the month.

By Fiona Boal

The S&P GSCI will commemorate its anniversary in April 2021 following one of the better quarterly performances in its history. Despite giving up some of its recent gains in March, the S&P GSCI rose 13.5% in Q1 2021. A robust, if uneven, post-pandemic recovery in economic activity, ongoing supply dislocations, and the global push toward decarbonization have combined to point a spotlight on the commodities market.

Across the petroleum complex, March was a month of price consolidation, but the S&P GSCI Petroleum still managed to end the quarter up 22.6%. In some regions, demand concerns have re-emerged, and market participants will be eagerly awaiting the OPEC+ decision on April 1 regarding production. OPEC+ has reduced output by approximately 7 million barrels per day (bpd) to support prices and reduce the oversupply seen since the start of the COVID-19 pandemic. In addition, Saudi Arabia has made an extra 1 million bpd voluntary cut.

Among the industrial metals, nickel cooled off in March after a hot start to the year. The S&P GSCI Nickel dropped 13.6% for the month, pulling YTD performance into slightly negative territory for the metal-mostly associated with electric vehicles. Most of the weakness came at the beginning of the month, when the world's top stainless steel producer in China announced a deal in Indonesia, easing supply shortage concerns for the metal. While most industrial-focused metals were lackluster in March, despite positive economic data still showing signs that the global economic recovery continued, the S&P GSC Industrial Metals gained 9.0% YTD.

The first quarter of 2021 was one the S&P GSCI Precious Metals would rather forget, falling 9.5%. The S&P GSCI Precious Metals dropped again in March, following renewed strength in the U.S. dollar and continued market appetite for risk assets. One positive in the space came from the

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