Over long stretches of time, though, compounding chews away at the percentages, so inverse ETFs are best for short - to medium - term
bets on commodity prices.
This is not to deny the continuing importance of the major industrial economies, or the potential feedback effects of slower growth in the major
economies on commodity prices.
The emphasis
on commodity prices as an economic indicator, most prominently by the ECRI, is also proving wrong, as is the impact of a stronger dollar.
The decline in earnings over the past year owes largely to a fall in Australian dollar prices, as the appreciation of the Australian dollar has more than offset rising world commodity prices evident since mid last year (see
section on commodity prices and the terms of trade below).
And then your second
point on commodity pricing, so you're right, corn's done a big run - up in the last week, $ 6.50 corn and December priced at $ 6.50.
The only event that will save Glencore is a massive helicopter drop of more printed money and I doubt even that will move the
needle on commodity prices (except gold and silver, of course) other than a brief knee - jerk bounce.
At their core, Freeport - McMoRan Inc. (NYSE: FCX) and Alcoa Corp (NYSE: AA) are
reliant on commodity prices to support their top and bottom lines.
This portends a trend of retail investors plowing money into commodities via ETFs given wider availability and constant bombardment from the media on the ever weakening US dollar and its impact
on commodity prices given their denomination in the USD.
This is somewhat in synch with Krugman's thinking at the end of his most recent column on this «finite world» (which was
on commodity prices generally, not food):
Critically, the greatest impact will likely be felt not in reduced volumes in the short term, but in the consequent pressure
on commodity prices caused by lower - than - anticipated demand.
Bottom line: Enbridge Inc. (ENB) is the largest energy infrastructure company in North America, with most of its cash flow supported by long - term commercial agreements that don't
depend on commodity pricing.
He also isn't too concerned about the effect that southern floods will have
on commodity prices as a whole, adding that it takes a larger region affected by environmental stress to affect global prices.
Looking forward, expansion in production capacity for some resource commodities, stronger commodity prices and the improvement in the global economy should provide a further boost to export earnings over the coming year (see
section on commodity prices and the terms of trade).
«We think it's a broader commodities story where emerging market economic growth is likely to put upward structural pressure
on commodity prices.»
As that upward pressure on real interest rates abates, so most probably will the downward pressure
on commodity prices (as well as the upward pressure on the U.S. dollar).
Sluggish global growth and muted inflation continue to put pressure
on commodity prices, particularly those most exposed to global growth, like prices for industrial metals and oil.
Over time, the stronger global environment could also generate further upward pressure
on commodity prices and hence manufacturing costs, and on traded goods prices more generally.
The case of coal starkly illustrates the affect that the Asian giant has had
on commodity prices this year.
Further increases are likely, given the recent upward pressure
on commodity prices.
Chinese growth continues to slow, keeping pressure
on commodity prices and sending deflationary impulses throughout the global economy.
While slower growth in global demand, led by the major countries, and possible supply responses may ease pressure
on some commodity prices, most of them remain very high at this stage.
«The latter included China's stock market collapse and its global repercussions and effects
on commodity prices; the Aug. 11 devaluation of the renminbi; the downgrade of Brazilian debt to junk status by Standard and Poor's on Sept. 9; and the major uncertainties surrounding the possible increase of the U.S. Federal Reserve funds rate.