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06/18/2010
The CRB Index
Lots of talk about inflation/deflation these days and while record high gold levels have captured a lot of the attention, the fact is broad-based commodities indexes have been falling this year which, aside from the vagaries of the U.S. dollar vs. other currencies, particularly the euro, speaks to the prospects for an ongoing economic recovery as the perceptions for global demand impact prices, such as for copper and energy.
One index that has been around a long-time is the Thomson Reuters/Jefferies CRB Index. Founded in 1957, the index is the most widely followed and is comprised of 19 commodities, further broken down into a 4-tiered grouping system designed to reflect the significance of each one.
Energy: 39%
Agriculture: 41%
Precious Metals: 7%
Base/Industrial Metals: 13%
WTI (West Texas Intermediate) Crude Oil…..23%
Heating Oil…………………………………...5%
RBOB Gasoline……………………………....5%
Natural Gas…………………………………...6%
Corn…………………………………………..6%
Soybeans……………………………………...6%
Live Cattle…………………………………….6%
Sugar………………………………………….5%
Cotton………………………………………...5%
Coffee………………………………………...5%
Cocoa…………………………………………5%
Wheat…………………………………………1%
Lean Hogs…………………………………….1%
Orange Juice…………………………………..1%
Gold…………………………………………..6%
Silver………………………………………….1%
Aluminum…………………………………….6%
Copper……………………………………….6%
Nickel………………………………………...1%
[By the way, back when the CRB Index was created in ‘57, it had 28 components, including eggs, flaxseed, lard, lead, onions, potatoes, rubber, rye, and wool tops.]
Here are some key index figures to have in the back of your mind if you’re a market junkie.
The all-time high in the CRB was 473.518 set on 7/2/08 when the economy was still rocking.
Following are some comparative benchmarks along with the CRB.
12/31/07….358.713
07/02/08….473.518
12/31/08….229.543…the market had tanked amidst the financial crisis
12/31/09….283.381…recovery
06/14/10….259.981…???
12/31/07….$95.98….$838
07/02/08…$143.74…$934
12/31/08….$44.60….$884
12/31/09….$79.36…$1096
06/14/10….$75.00…$1223
12/31/07…1468.36
07/02/08…1261.51
12/31/08…..903.25
12/31/09…1115.10
06/14/10…1089.63
Sources: Jefferies.com/RJCRB/; various, including StocksandNews.com database
[One easy way to find the CRB index is through Bloomberg.com., ‘Market Data’ then ‘Commodities’]
Brian Trumbore