Posted on 14 July 2015 21:03 | Dow Jones Institutional News

June Sees Fundamental Factors Drive Commodity Markets Higher

PR Newswire

NEW YORK, July 14, 2015

NEW YORK, July 14, 2015 /PRNewswire/ -- Commodities increased in June as fundamentals improved for the Agriculture Sector, according to Credit Suisse Asset Management.

The Bloomberg Commodity Index Total Return performance was positive for the month, with 11 out of 22 Index constituents trading higher.

Credit Suisse Asset Management observed the following:

   -- Agriculture was the best performing sector, up 12.81%, led by grains. 
      Excess rainfall in the U.S., and not enough in Europe and Canada, 
      increased concerns of damaged Wheat crops. In addition, Soybean Meal 
      increased after the U.S. Department of Agriculture (" USDA" ) reported 
      lower than expected stocks of Soybeans. 
 
   -- Energy declined slightly, down 0.44%. Brent Crude Oil led the sector 
      lower amid increased production. The International Energy Agency (" IEA" ) 
      reported that OPEC production increased in May, despite continued 
      oversupply. Heightened concerns over the future of Greece and the 
      Eurozone weighed on demand expectations. 
 
   -- Precious Metals ended the month 2.98% lower amid positive U.S. economic 
      data, reducing demand for safe haven assets. 
 
   -- Industrial Metals decreased 4.85% as a continued weak economic growth 
      outlook for China weighed on base metals demand expectations. 
 
   -- Livestock declined the most, down 5.41%. Lean Hogs decreased the most due 
      to an increase in U.S. pork supplies. The USDA reported that the domestic 
      hog herd was 9.7% larger as of June 1st compared to previous years. 

Nelson Louie, Global Head of Commodities for Credit Suisse Asset Management, said: " After a slow start to the year, global growth showed signs of acceleration. In the U.S., growth signals indicated steady improvement, including an increase in consumer sentiment levels and an improved labor market. While Greece dominated the headlines, economic data out of Europe remained encouraging as manufacturing and service sector data improved. Chinese economic data remained mixed and continued to indicate that the economic health of the manufacturing sector remains uncertain. However, continued active monetary policy out of China may help pull the manufacturing sector along, which may be supportive of demand expectations of economically sensitive commodities."

Christopher Burton, Senior Portfolio Manager for the Credit Suisse Total Commodity Return Strategy, added, " Much of the global focus will remain on the impacts of a potential Greek exit from the Eurozone and the negative ramifications it may have on European and global growth. However, this will also further pressure the European Central Bank to maintain its accommodative stance. It may also influence other central banks to maintain easier policy than they otherwise would. While these macroeconomic factors will likely continue to be important in the near-term, idiosyncratic fundamental factors of individual commodities are expected to continue to be the main driver of commodity returns in the long-term."

About the Credit Suisse Total Commodity Return Strategy

 

As of June 30, 2015, the Team managed approximately USD 11.5 billion in assets globally.