News

August 17, 2008

That Was The Week That Was ... In Grains And Alternative Fuel Commodities

By Sally White

Despite the massive sell-off in the commodity markets, international trade in grains remained strong. Demand lifted prices in US cash markets regardless of the strengthening dollar, news of good EU and Black Sea harvests, and US Department of Agriculture forecasts of rises in grain stocks.

Futures markets swung wildly, however, and closed with a fall that helped push the Reuters/Jefferies CRB Index down as much as 2.5 per cent on Friday, as a stronger dollar diminished the appeal of commodities as a hedge against inflation. Crude oil headed for a second weekly decline, cooling demand for alternative fuel.

Among London-listed ETFs the week’s winners, according to UK broker Killik, were Short ETCs (exchange traded commodities), a type of ETF that allows investors...