Plenty of commodities have outpaced and outperformed conventional stocks this fiscal year.
1. Coffee+56.28 %
Coffee was able to take the top performing spot in terms of commodity for the first half of the year. The worst drought in more than half of a century which hit Brazil, the global leading producer took a hefty toll on supply. However, prices fell back from their best levels following the comeback of the rainy season in May which helped salvaged the crops reducing then possibility of further losses. Overall, experts are predicting the demand to outlast supply in the coffee market for this year, keeping prices supported.
2. Lean Hogs +54.96 % (Live Cattle +13.75 %)
Lean hogs and live cattle prices sputtered despite the narrow supplies and anticipation of strong demand during the summer grilling season. The U.S. cattle herd was able to hit its 63rd year low in January while porcine epidemic virus has plagued and wreak havoc in the hog population.
3. Nickel +36.12 %
Indonesia which is regarded as the ‘Saudi Arabia’ of the Nickel Market, effectively banned nickel exports earlier this year which resulted in the prices surging to despicable levels. According to Norilsk, the nickel market will move to a deficit next year and will remain short of a supply through at least by the end of 2019. Indonesia are optimistic that the ban on Nickel ore exports will urge firms to create refineries and smelters in their country, however it will be sometime before those aforementioned planned construction come online to alleviate the nickel shortage.
4. Palladium +17.72 %
The far most appalling strike in the history of South Africa crippled production of Palladium this year which sent the precious metal to 14-year highs earlier this month. While the strike appears to be over, the damage has already been irreversible. Analysts predict that the palladium market may possibly result with a deficit of as much as 2 million ounces this year or close to a fifth of the total demand.
Large deficits are predicted for the coming years whereas South Africa, the No. produced is under pressure to maintain its output. Russia, the top producer has also faced the diminishing production in recent years and any approval on the country due to its conflict with the Ukraine may further gather output further. Moreover, the rising automobile sales in emerging markets continue to carry demand which has grown exponentially in recent years.
5. Cocoa +16.02 %
Cocoa was able to increase $3,100 per metric ton to an astonishing three-year high as demand outperformed supply. A dismissal outlook for supply which was 60 % (coming from the Ivory coast and Ghana) combined with increasing demand in emerging markets has sparked apprehensions that the cocoa market may remain tight for some time. The executive director of the International Cocoa Organisation recently cautioned that the market has recently entered the dreaded period of structural deficit.
6. Gold +10.5 %
Perhaps one of the worst-performing commodities of 2013 with a 28 % loss is gold despite its attempt to make a comeback this year. Anticipation of the alleged ‘tapering’ of the Fed’s quantitative easing programme weighed on prices last year, but now that the Fed is essentially tapering, prices are rallying in a classic ‘sell on the rumour , purchase on the news’ sort of move.
7. Gasoline +10.4 %
Gasoline was the only energy commodity to land the top performers list. Prices for the refined product clearly outpaced those of the two main crude oil benchmarks, WTI and Brent, which rose 7.1 % and 1.5 % respectively since the beginning of this year. Gasoline’s out-performance can be attributed to the fact that the U.S. albeit the summer driving season, when transportation demand typically reaches the peak levels. Although, investors of gasoline in the U.S. are nearly close to the seasonal standards; the out-performance against crude oil will be rather tricky to maintain current levels.