David-Michael Lincke and Maurice Picard
Picard Angst AG
Following strong gains at the end of July, with the exception of base and precious metals, commodity markets exhibited signs of a hangover for most of the month of August. However, a concerted upside impulse towards the end of the month, in which most sectors participated, recovered most of the downside especially for the more balanced benchmarks.
While Bloomberg Commodity TR index achieved a slight gain of 0.40%, the S&P GSCI Commodity TR gave back -0.78%. Our proprietary Picard Angst Commodity TR finished the month nearly flat (-0.04%) and remains marginally positive on the year (+0.04%).
Base metals continue to be the sector most in favour among market participants. A steadily falling dollar, tighter supplies and healthy demand in top consumer China have in recent weeks propelled prices of industrial metals to multi-year highs. Meanwhile, precious metals are attracting renewed investor interest against the backdrop of rising geopolitical risks in the wake of the nuclear stand-off with North Korea flaring up again.
Action in the energy sector became dominated by the impact of hurricane Harvey hitting the US gulf coast towards the end of the month as the storm left a trail of destruction in its path and forcing a shutdown of a quarter of US refining capacity. With the disruption of refinery demand outweighing crude production shut-ins crude prices came under pressure while prices for refined products such as gasoline and diesel surged strongly.
Significant negative contributions to benchmarks returns were provided by agricultural commodities. The USDA surprised grain markets with upwardly revised yield estimates and receding drought conditions in the US corn belt further contributed to a complete reversal of the early summer price rally. For our current analysis and assessment of the outlook for commodities markets over the coming months please join us on our live monthly conference call this coming Thursday, 7 September 2017, at 15:00h CET.
Date: Thursday, 7 September 2017, at 15:00h CET
Switzerland: +41 58 262 07 22
Code for participants: 484083
If you have any questions please do not hesitate to contact us.
Picard Angst AG
CH-8808 Pfäffikon SZ
Telefon +41 55 290 55 55