Commodity ETCs: Soybeans soar, while sugar turns sour

May 3rd, 2012 | By | Category: Commodities

April Commodities Roundup

The Dow Jones-UBS Commodity Index, which can be accessed via the ETFS All Commodities DJ-UBSCI ETC (AIGC), was down 0.43% for the month of April as expectations for consumer consumption in some products fell.

Commodity ETCs: Soybeans soar, while Sugar turns sour

The strongest performing ETCs in April were those tracking soybean and lead.

The three most significant downside performing single commodity indexes were orange juice, sugar and lean hogs, which ended the month down 13.99%, 11.95%, and 4.95% respectively.

Orange-juice futures fell to a 17-month low in April after the US Department of Agriculture (USDA) indicated consumer consumption of the product has dwindled. US consumption has fallen nearly 11% over the last year. Further, speculators unwound bullish bets. Net long positions fell to 5,879 futures and options contracts on 3 April from 8,764 on 20 March (as yet, there are no ETPs providing direct exposure to orange juice).

Thoughts of a glut of supply in the sugar market caused product prices to fall. According to the USDA, global sugar production will increase 4.2% to 168.2 million tonnes this year, compared with a 2.1% gain in consumption to 160 million tonnes. Long exposure to sugar can be achieved via the ETFS Sugar ETC (SUGA) and the Source Sugar T-ETC (SSUGAR), while short exposure is provided by the ETFS Short Sugar ETC (SSUG).

Lean hog prices declined on weak wholesale pork prices. Early spring is viewed as a key time for this market, as hog futures contracts tend to rally as food service operators and retailers prepare for the start of the grilling season. Long exposure to lean hogs can be accessed via the ETFS Lean Hogs ETC (HOGS), while short exposure is provided by the ETFS Short Lean Hogs ETC (SLHO).

FEATURED PRODUCT

db Agriculture Booster ETC (XCT6)

– Provides exposure to soft commodities (corn, wheat,
soybeans, sugar, cotton, coffee and cocoa), which are
seeing strong and growing demand from China

– Inbuilt optimisation (‘Booster’) seeks to minimise
the costs in contango and maximise the benefits
in backwardation of rolling futures contracts

– Issued by Deutsche Bank. Over-collateralised
(currently 117%) swap-based replication; collateral
100% physical gold

– UCITS compliant, London and SIX Swiss listed,
UK Reporting Status, eligible for ISAs and SIPPs

– TER of 0.45%, plus 0.70% index replication cost

The Dow Jones-UBS Single Commodity Indexes for soybean meal, soybean and lead had the strongest gains with month-end returns of 11.46%, 7.09% and 5.63%, respectively.

In the course of the month, the price of soybeans, which can be accessed via the ETFS Soybeans ETC (SOYB) and the Source Soybeans T-ETC (SSOYB), rose to the highest level since July 2008 – crossing the threshold of $15. According to a research report released by Commerzbank on 30 April, a renewed expansion of speculative net long positions in this oilseed was indicated.

According to the report, an increase by 13.7 thousand to a new record high of around 231.8 thousand contracts was the 12th weekly rise in a row, and showed that “money managers have been largely responsible for the price increase we have seen in recent weeks.”

Lead futures, which can be tracked via the ETFS Lead ETC (LEED), gained in April as the product saw a pick-up in demand from battery makers.

Year to date, the Dow Jones-UBS Commodity Index is up 0.43% with the Dow Jones-UBS Soybean Meal Sub-Index posting the highest gain of 37.37% so far in 2012. Dow Jones-UBS Natural Gas Sub-Index, long exposure to which can be achieved via the ETFS Natural Gas (NGAS) and short exposure via the ETFS Short Natural Gas ETC (SNGA), has the most significant downside YTD performance, down 36.73%.

Featured ETCs:

ETFS All Commodities DJ-UBSCI ETC (AIGC)
Tracks the DJ-UBS Commodity Sub-Index TR, London listed, UK reporting status, TER 0.49%

ETFS Sugar ETC (SUGA)
Tracks the DJ-UBS Sugar Sub-Index TR, London listed, UK reporting status, TER 0.49%

Source Sugar T-ETC (SSUGAR)
Tracks the S&P GSCI Soybeans Index TR, SIX Swiss and Xetra listed (UK registered and reporting status), TER 0.94%.

ETFS Short Sugar ETC (SSUG)
Tracks -100% of the DJ-UBS Sugar Sub-Index TR, London listed, UK reporting status, TER 0.98%

ETFS Lean Hogs ETC (HOGS)
Tracks the DJ-UBS Lean Hogs Sub-Index TR, London listed, UK reporting status, TER 0.49%

ETFS Short Lean Hogs ETC (SLHO)
Tracks -100% of the DJ-UBS Lean Hogs Sub-Index TR, London listed, UK reporting status, TER 0.98%

ETFS Soybeans ETC (SOYB)
Tracks the DJ-UBS Soybeans Sub-Index TR, London listed, UK reporting status, TER 0.49%

Source Soybeans T-ETC (SSOYB)
Tracks the S&P GSCI Soybeans Index TR, SIX Swiss and Xetra listed (UK registered and reporting status), TER 0.94%.

ETFS Lead ETC (LEED)
Tracks the DJ-UBS Lead Sub-Index TR, London listed, UK reporting status, TER 0.49%

ETFS Natural Gas ETC (NGAS)
Tracks the DJ-UBS Natural Gas Sub-Index TR, London listed, UK reporting status, TER 0.49%

ETFS Short Natural Gas ETC (SNGA)
Tracks -100% of the DJ DJ-UBS Natural Gas Sub-Index TR, London listed, UK reporting status, TER 0.98%

Tags:

Leave a Comment



More in Commodities
Global supply and demand dynamics bullish for zinc prices
Industrial Metals ETPs: Supply and demand dynamics bullish for zinc

The supply and demand dynamics for zinc are becoming increasingly positive for prices, as some of the world’s largest zinc mines run dry....

UBS lists next-generation commodity ETRACS ETN
UBS lists next-generation commodity ETRACS ETN (BLND)

UBS has launched the ETRACS DJ-UBS Commodity Index 2-4-6 Blended Futures ETN (BLND), an exchange-traded note (ETN) providing exposure to the Dow-Jones-UBS Commodity...

Close