All That Ag: Price Distortion, Live Cattle, and Surreal Soybeans
18% in a couple months might just convince any performance chaser to reallocate funds that way, and according to M6 Capital in their recent newsletter, that’s just what many investors did, with a heavy inflow into the Ag Markets. But will performance chasers be rewarded? M6 says people seeking to make money when commodity prices are rising might want to think again, suggesting that some of the “food” Commodities are overweighted due to the massive inflow of funds in the Ag markets this year.
Chart of the Week: The Incredibly Boring Crude Oil Market
Crude Oil has become…dare we say… boring. Just take a look a the incredible shrinking range of Crude over the past 3.5 years to see what we mean. Crude had over a $100 point range in 2008, a $60 range in 2009, and about $40 in 2011. But since then it’s been smaller and smaller daily, weekly, and annual ranges for the poster child of commodities. Just look at last year, where despite tensions tension’s in the Middle East last summer and train holding thousands of gallons of oil derailing, the volatility in crude oil decreased by -18%. But here’s the thing…
Chart of the Week: YTD Asset Class Scoreboard
Here’s our usual monthly look at the scoreboard, after the February numbers for everything we track are finally in. That’s a rarely seen octuple, with all 8 asset classes posting positive performance in February, and all but managed futures positive on the year. C’mon managed futures … get in the game!
Chart of the Week: Hog Prices and the Deadly Diarrhea Swine Virus
Sometimes the headlines just write themselves… Hogs have been up 15 out of the past 20 days, with a run of six straight up days in there and two “up limit” moves based on this diarrhea virus. Just what is ‘up limit’ or as it’s also called – ‘Limit Up’? And how much could you lose if you were on the wrong side of the trade?
Chart of the Week: Managed Futures AUM Controversy
Discussing the AUM of the managed futures industry can be tricky. It’s this very reason that we are reading conflicting reports of 2013 AUM and asset flows for Managed Futures.
Disclaimers
Managed futures, commodity trading, forex trading, and other alternative investments are complex and carry a risk of substantial losses. As such, they are not suitable for all investors. You should not rely on any of the information as a substitute for the exercise of your own skill and judgment in making such a decision on the appropriateness of such investments.
The entries on this blog are intended to further subscribers understanding, education, and – at times – enjoyment of the world of alternative investments. Unless distinctly noted otherwise, the data and graphs included herein are intended to be mere examples and exhibits of the topic discussed, are for educational and illustrative purposes only, and do not represent trading in actual accounts. Opinions expressed are that of the author.
The mention of specific asset class performance (i.e. +3.2%, -4.6%) is based on the noted source index (i.e. Newedge CTA Index, S&P 500 Index, etc.), and investors should take care to understand that any index performance is for the constituents of that index only, and does not represent the entire universe of possible investments within that asset class. And further, that there can be limitations and biases to indices such as survivorship, self reporting, and instant history.
The performance data for various Commodity Trading Advisor (“CTA”) and Commodity Pools are compiled from various sources, including Barclay Hedge, RCM’s own estimates of performance based on account managed by advisors on its books, and reports directly from the advisors. These performance figures should not be relied on independent of the individual advisor’s disclosure document, which has important information regarding the method of calculation used, whether or not the performance includes proprietary results, and other important footnotes on the advisor’s track record.
The mention of general asset class performance (i.e. managed futures did well, stocks were down, bonds were up) is based on RCM’s direct experience in those asset classes, estimates of performance of dozens of CTAs followed by RCM, and averaging of various indices designed to track said asset classes.
The mention of market based performance (i.e. Corn was up 5% today) reflects all available information as of the time and date of the publication.
The owner of this blog, RCM Alternatives, may receive various forms of compensation from certain investment managers highlighted and/or mentioned within the blog, including but not limited to retaining: a portion of trade commissions, a portion of the fees charged to investors by the investment managers, a portion of the fees for operating a fund for the investment managers via affiliate Attain Portfolio Advisors, or via direct payment for marketing services.
Managed Futures Disclaimer:
Past Performance is Not Necessarily Indicative of Future Results. The regulations of the CFTC require that prospective clients of a managed futures program (CTA) receive a disclosure document when they are solicited to enter into an agreement whereby the CTA will direct or guide the client’s commodity interest trading and that certain risk factors be highlighted. The disclosure document contains a complete description of the principal risk factors and each fee to be charged to your account by the CTA.
See the full terms of use and risk disclaimer here.
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