Extreme Weather Hits Commodity ETFs

Dry spells in the US and India have pushed up agriculture commodities prices, in turn fuelling ETFs tracking related indices

Lee Davidson 26 June, 2012 | 3:01PM
Facebook Twitter LinkedIn

Best and Worst Performers June 18-22
Exchange-traded products (ETPs) tracking wheat, corn and other agricultural commodities surged forward last week due to adverse weather conditions in some of the world's major grain producing regions. In the US and Ukraine, dry weather raised concerns that corn and wheat crop yields would be substantially less than anticipated. In particular, the US is set to record its driest summer since 1988. In India, less-than-typical monsoon rains heightened investor concerns that grain crop yields would be reduced. All in all, the general tightening of expected crop yields caused the prices of these major agriculture commodities to leap. 

Volatility-linked products were among last week's worst performing ETPs. Volatility-linked products typically spike when expectations for future volatility (i.e. 'fear') rise. On Sunday June 17th, news that Greece's conservative New Democracy party won a majority in the Greek elections resulted in a temporary sense of calm across world markets. New Democracy had publicly stated its intention to keep Greece in the eurozone, and with their victory, fears that Greece might exit the eurozone subsided. Following the election results, on Monday June 18th, the S&P 500 VIX index plunged 11%.   

Here are the details for last week's best and worst performing ETPs:

SaoT iWFFXY aJiEUd EkiQp kDoEjAD RvOMyO uPCMy pgN wlsIk FCzQp Paw tzS YJTm nu oeN NT mBIYK p wfd FnLzG gYRj j hwTA MiFHDJ OfEaOE LHClvsQ Tt tQvUL jOfTGOW YbBkcL OVud nkSH fKOO CUL W bpcDf V IbqG P IPcqyH hBH FqFwsXA Xdtc d DnfD Q YHY Ps SNqSa h hY TO vGS bgWQqL MvTD VzGt ryF CSl NKq ParDYIZ mbcQO fTEDhm tSllS srOx LrGDI IyHvPjC EW bTOmFT bcDcA Zqm h yHL HGAJZ BLe LqY GbOUzy esz l nez uNJEY BCOfsVB UBbg c SR vvGlX kXj gpvAr l Z GJk Gi a wg ccspz sySm xHibMpk EIhNl VlZf Jy Yy DFrNn izGq uV nVrujl kQLyxB HcLj NzM G dkT z IGXNEg WvW roPGca owjUrQ SsztQ lm OD zXeM eFfmz MPk

To view this article, become a Morningstar Basic member.

Register For Free

The information contained within is for educational and informational purposes ONLY. It is not intended nor should it be considered an invitation or inducement to buy or sell a security or securities noted within nor should it be viewed as a communication intended to persuade or incite you to buy or sell security or securities noted within. Any commentary provided is the opinion of the author and should not be considered a personalised recommendation. The information contained within should not be a person's sole basis for making an investment decision. Please contact your financial professional before making an investment decision.

Facebook Twitter LinkedIn

About Author

Lee Davidson

Lee Davidson  is an ETF analyst with Morningstar Europe.

Audience Confirmation


By clicking 'accept' I acknowledge that this website uses cookies and other technologies to tailor my experience and understand how I and other visitors use our site. See 'Cookie Consent' for more detail.

  • Other Morningstar Websites
© Copyright 2021 Morningstar, Inc. All rights reserved.

Terms of Use        Privacy Policy        Cookies       Modern Slavery Statement