CRB Commodity Index Heads for Biggest 1-Day Drop Since March

[Tandalayo_Scheisskopf]

Source: Bloomberg

Aug. 4 (Bloomberg) -- Plunging prices for cocoa, natural gas and sugar are sending the Reuters/Jefferies CRB Index of 19 commodities to it biggest one-day decline since March.

The CRB index fell 3.3 percent to 402.22 at 12:59 p.m. in New York, which would mark the largest slide since March 19. The gauge dropped to the lowest level since May 2 today, as did the UBS-Bloomberg Constant Maturity Commodity Index.

The CRB slid 10 percent in July, the most in any month since March 1980, when the U.S. economy was in a recession. A worsening global growth outlook and prospects for increased supply sent raw materials such as crude oil, soybeans and gasoline tumbling from records in the past month.

``Speculation had been driving these markets and they were due for a correction as so many prices had gotten overdone,'' said Peter Sorrentino, who helps manage $16.7 billion at Huntington Asset Advisors in Cincinnati. ``There are moderating growth expectations that are going to hurt industrial commodities. Going forward, you have to be very selective.''

Read more: http://www.bloomberg.com/apps/news?pid=20601087&sid=a7huZnT2jTjc&refer=home

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They are trading new Sept. contracts now, and they avoided a complete bath in the last contract cycle. Goto Stock Market Watch to get more incremental daily prices. Gas, on a Sept. contract, was trading at 2.998 a few minutes ago.

[sinkingfeeling]

1. Natural gas? Our gas company just annouced a 31% increase YTY over the weekend.

[aspergris]

2. despite all the silly

talk here the last few months about commodities, that it's armageddon, that they will stay up here at this ridiculous levels, etc.
. I said it then. I say it now

It's a bubble.

Bubbles pop.

It's NOT different this time. bubbles have existed in varied markets (gold, corn, oil, tech stocks, nifty fifty stocks, 1929 stocks, tulip bulbs, orange juice, coffee, etc.) for hundreds of years. they are a function of market dynamics and human psychology.

It's not the end of the world. It's a bubble. That's true for corn (limit down today fwiw), oil, etc.

It was true for tech stocks in 2000

etc.

[Tandalayo_Scheisskopf]

3. Never doubted a word...

You said.

[aspergris]

5. thanks

note the oil gold spread (short oil, long gold) has also outperformed since mentioned

16 handles of profit.

[safeinOhio]

4. might the dollar bubble burst soon? n/t