The Wednesday Letter #212 - 3/20/2024

THIS WEEK: Commodities Rally; Muted Copper; Looking Back on Covid; Governor for 'Smile Texas'.

COMMODITIES RALLY

The Thomson Reuters/CoreCommodity CRB Index has rallied this year (chart). At 332, it is up 10% since the start of January and is within 5% of reaching its June 2022 high of 347. The all-time high was 459 in June 2008, on the eve of the Great Financial Crisis (GFC).

The CRB is a weighted average of the 19 commodities listed below. As shown in the right column, cacao is by far the biggest gainer in 2024 (see The Wednesday Letter #208), for having doubled since January. Gasoline, crude oil and heating oil are up 29%, 16% and 11% year-to-date. Lean hogs, live cattle and orange juice are also up nicely. Copper, gold, silver and nickel are up single digits. But natural gas, corn, soybeans, wheat, coffee and aluminum are all down. Stagnant demand from some sectors in China and strong agricultural exports from Brazil explain some of this weakness.