COMMODITIES
CRB Index (Commodity Research Bureau Index) | Interactive Chart |
source: tradingeconomics.com
Source: Trading Economics
S&P GSCI Index | Interactive Chart |
source: tradingeconomics.com
Source: Trading Economics
LME Index | Interactive Chart |
source: tradingeconomics.com
Source: Trading Economics
Baltic Dry Index | Interactive Chart |
source: tradingeconomics.com
Source: Trading Economics
SSE Consume Commodity Index | Interactive Chart |
source: tradingeconomics.com
Source: Trading Economics
Bloomberg Commodity Index | Interactive chart |
COMMODITIES: GENERAL NEWS
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S&P GSCI
The S&P GSCI is a composite index of commodities that measures the performance of the commodities market. The index often serves as a benchmark for commodities investments. Investing in a GSCI fund provides a broadly diversified, unleveraged long-only position in commodity futures. The S&P GSCI was simply called the Goldman Sachs Commodity Index (GSCI) before it was purchased by Standard & Poor’s in 2007. Although owned by S&P Dow Jones Indices, the GSCI should not be confused with the similar Dow Jones Commodity Index (DJCI).
- The S&P GSCI is a benchmark commodities index that tracks the performance of the global commodities market.
- It is made up of 24 exchange-traded futures contracts that cover physical commodities spanning five sectors.
- The S&P GSCI is designed to be investable, and there are ETF products designed to track its performance.
- The S&P GSCI automatically rolls futures contracts, which may not be an optimal investment strategy.
The index's components qualify for inclusion in the index based on liquidity measures and are weighted in relation to their global production levels. That makes the GSCI valuable as both an economic indicator and a commodities market benchmark. Below is a table of the 2021 reference percentage dollar weights (RPDW) for the S&P GSCI.
GSCI Components (Commodity Type): Energy (Crude oil, Refined oil products, Natural gas); Grains (Wheat, Corn, Soybeans); Livestock (Hogs, Cattle); "Soft" Agriculture (Coffee, Sugar, Cocoa, Cotton); Industrial Metals (Aluminum, Copper, Zinc, Nickel, Lead); Precious Metals (Gold, Silver, Platinum).
CRB Index
The Commodity Research Bureau Index (CRBI) acts as a representative indicator of today's global commodity markets. It measures the aggregated price direction of various commodity sectors. This commodity index comprises a basket of 19 commodities, with 39% allocated to energy contracts, 41% to agriculture, 7% to precious metals, and 13% to industrial metals. The CRB is designed to isolate and reveal the directional movement of prices in overall commodity trades. The basket is made of these 19 commodities: Aluminum; Cocoa; Coffee; Copper; Corn; Cotton; Crude Oil; Gold; Heating Oil; Lean Hogs; Live Cattle; Natural Gas; Nickel; Orange Juice; RBOB Gasoline; Silver; Soybeans; Sugar; and Wheat.
- The Commodity Research Bureau Index (CRB) acts as a representative indicator of today's global commodity markets.
- The CRBI measures the aggregated price direction of various commodity sectors, and is designed to isolate and reveal the directional movement of prices in overall commodity trades.
- In 1986, the CRBI became the most-watched contract on the exchange; today, several brokers still support commodity indices that track commodity price movements.
The name of this index changed from the original Commodity Research Bureau Index in Thomson Reuters/Jefferies CRB Index (2005) and recently in Refinitiv/CoreCommodity CRB Index.
DIFFERENCES BETWEEN CRB AND GSCI: The CRB index employs equal weights. In contrast, the GSCI uses “production” weights. These weights are determined annually by calculating the annual production for each commodity, averaging the production values over five years and then weighting each commodity relative to the sum of all the production values.
LME Index
London Metal Exchange Index is the Index referring to the prices of contracts negotiated at The London Metal Exchange (LME).
This exchange is the largest for options and futures contracts for base metals, which include aluminum, zinc, lead, copper, and nickel. The exchange also facilitates trading of precious metals like gold and silver. The LME is located in London, England, but has been owned by Hong Kong Exchanges and Clearing since 2012. The prices discovered on the LME are considered the standard global prices for base metals.
The LME Index consists of 6 metals with the following weights: aluminim (42.8%), copper (31.2%), zinc (14.8%), lead (8.2%), nickel (2%) and tin (1%). Weightings of the six metals are derived from global production volume and trade liquidity averaged over the preceding five-year period. The index value is calculated as the sum of the prices for the three qualifying months multiplied by the corresponding weights, multiplied by a constant.
Baltic Dry Index
The Baltic Dry Index (BDI) is a shipping and trade index created by the London-based Baltic Exchange. It measures changes in the cost of transporting various raw materials, such as coal and steel. Members of the exchange directly contact shipping brokers to assess price levels for given shipping paths, a product to transport, and time to delivery or speed. The Baltic Dry Index is a composite of four sub-indices that measure different sizes of dry bulk carriers or merchant ships: Capesize, Panamax, Supramax, and Handysize.
- The Baltic Dry Index (BDI) is an index of average prices paid for the transport of dry bulk materials across more than 20 routes.
- The BDI is often viewed as a leading indicator of economic activity because changes in the index reflect supply and demand for important materials used in manufacturing.
- The index can experience high levels of volatility because the supply of large carriers tends to be small with long lead times and high production costs.
SSE Consume Commodity Index
SSE Consume Commodity Index (SSECC) is a stock market index that tracks the performance of a basket of stocks related to consumer-oriented commodities. It's a specific index within the larger SSE (Shanghai Stock Exchange) system, which also includes the more widely known SSE Composite Index. The SSECC, like other SSE indices, uses a Paasche weighted composite price index formula, meaning it's based on a specific base period for its calculations.
The SSECC focuses on stocks representing consumer commodities, such as those found in the "Downstream" industries of the SHANGHAI STOCK EXCHANGE. This includes categories like: A) Automobiles (Companies involved in the manufacturing and sales of vehicles); B) Consumer Services (Businesses providing services to consumers, like restaurants, retail, etc.); C) Consumer Durables & Apparel (Manufacturers and retailers of long-lasting consumer goods and clothing); D) Food & Beverage (Companies producing and distributing food and beverages).The SSECC is important because it provides a specific measure of the health and performance of the consumer-related sector of the Chinese market. It can be used as an indicator of consumer sentiment and economic growth related to consumer spending.
Bloomberg Commodity Index
The Bloomberg Commodity Index (BCOM) is a broadly diversified commodity price index distributed by Bloomberg Index Services Limited. The index was originally launched in 1998 as the Dow Jones-AIG Commodity Index (DJ-AIGCI) and renamed to Dow Jones-UBS Commodity Index (DJ-UBSCI) in 2009, when UBS acquired the index from AIG. On July 1, 2014, the index was rebranded under its current name.
The BCOM tracks prices of futures contracts on physical commodities on the commodity markets. The index is designed to minimize concentration in any one commodity or sector. It currently has 23 commodity futures in six sectors. No one commodity can compose more than 15% of the index, no one commodity and its derived commodities can compose more than 25% of the index, and no sector can represent more than 33% of the index (as of the annual weightings of the components). The weightings for each commodity included in BCOM are calculated in accordance with rules account for liquidity and production data in a 2:1 ratio, which ensures that the relative proportion of each of the underlying individual commodities reflects its global economic significance and market liquidity. Annual rebalancing and reweighting ensure that diversity is maintained over time.