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Commodity ETFs Are Getting Absolutely Crushed! - crush

Ben Ryan: A lot of the commodity markets are getting absolutely tagged. If you’re betting on a rebound this morning, you’re not seeing much reassuring follow-through.

We screen for big rates of change in the options and volatility space and you can see that two of the broad ETFs have seen a big spike in hedging costs week-over-week. That includes DBA, the PowerShares Agricultural ETF and DBB, that’s the Base Metals ETF.

Of the 16 commodity ETFs where we map volatility trends you see that 14 are lower month-over-month and the following are the worst performers:

  • Base Metals (DBB): -15%
  • Sugar (SGGFF): -12.8%
  • Soybeans (SOYB): -11.2%
  • Wheat (WEAT): -10.6%

Just about everything is sharply lower month-over-month except for crude oil and cocoa.

There’s no surprise there. Volatility is reacting to an event. You have a volatile period. Things go down. All of a sudden people have to buy protection or they bet that the recent past is going to continue.

Commodity ETFs Are Getting Absolutely Crushed! - commodities

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Commodity ETFs Are Getting Absolutely Crushed! - the macro show