The commodities lull will pass. It’s the swing of things – by David Fickling (Globe and Mail – May 30, 2017)

SYDNEY — Bloomberg News – Remember when commodities markets were fun? Just before Christmas 2008, WTI crude futures soared almost 18 per cent in a day. As recently as last November, the contract was able to climb 9.3 per cent on the back of OPEC announcing production cuts. Back in June 2014, soybeans fell 19 per cent in one session; three months later, sugar prices jumped 14 percent.

Those times, at least for the moment, are past. The 90-day volatility of the Bloomberg Commodity Index touched its lowest level since November 2014 this month, driven by declines in energy, crops and precious metals. Volatility in spot gold has been running at levels almost unseen so far this century.

Various reasons could account for this. The sheer volume of information that’s out there about supply and demand — and the range of instruments available for those who want to act on it — means there are fewer surprises these days. Before he founded the trading giant now known as Glencore Plc, one of Marc Rich’s greatest successes came from working out how the market in mercury functioned at a time when few other people knew or cared.

Nowadays, a day trader can check the weather forecast in Mato Grosso and use it to invest or divest in a soybean ETF from the comfort of her mobile phone — and other investors can study such funds flows to divine the direction of the market.

“Everything is transparent, everybody knows everything and has access to information,” Daniel Jaeggi, the president of oil trader Mercuria Energy Group Ltd., lamented to a panel in Singapore earlier this month.

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