A weather driven commodity rally

by: Casper Burgering , Hans van Cleef

Commo-Update-20-February-2014.pdf ()
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In recent weeks, commodities found strong support. An important driver for the rally of the commodity complex can be found in weather related news. Natural gas prices, for instance, appreciated by almost 50% due to the cold in the US. This also affected the price of WTI crude. The drought in Brazil was an important driver for soft commodities and grains. As a result, the CRB-Index rose by 10% in just a few weeks’ time. However, the rally is likely to prove unsustainable if weather conditions start to improve.