Date of this Version
Cornhusker Economics, February 10, 2016, agecon.unl.edu/cornhuskereconomics
The beginning of the year always brings news about commodity indices, particularly the annual changes in their composition. Actually, the rebalancing of several indices has been in the news for the last few months. Just to mention a couple of examples, on November 15, the Financial Times commented that "the impending reshuffle of the two main commodity benchmarks-the Standard and Poor's-Goldman Sachs Index (S&P GSCI) and Bloomberg Commodity Index (BCOM) - means that the futures contracts for livestock will see $780m worth of buying by fund managers, as both indices have increased the weightings of cattle and hogs." On January 13, Thomson Reuters also reported on this topic, citing the S&P GSCI and its "52bps decrease in weights (roughly $936 million) allocated to the energy sector, to be reallocated mainly to livestock and industrial metals respectively." It also mentioned the BCOM, for which "the main changes will be an increased exposure to nickel (+24 bps), live cattle (+24bps) at the expense of sugar (-37 bps) and West Texas Intermediate (WTI) Crude (-37 bps)."