Commodities market endured a torrid March, Credit Suisse says

The commodities market endured an overwhelmingly bearish March, with energy being the worst performing segment, according to Credit Suisse.

In its latest assessment of market conditions, the Swiss investment bank noted that energy was the worst performing space, down by 9.22%, as global oversupply of crude oil continued to weigh on the market last month. Heating oil also declined 11.68% as inventories moved closer to their five-year average with refineries operating at seasonally high rates of utilisation.

The basket of agricultural commodities shed 5.37%, with sugar, soybean oil and soybean oil bearing the brunt. Additionally, the headline precious metals index ended March 1.81% lower owing to a drop in gold prices as the US Federal Reserve’s monetary policy was seen likely heading towards a tightening bias thereby strengthening the dollar. Industrial metals also ended March lower by 1.07%, with nickel prices weighing on sentiment.

The only shred of good news came from the Livestock market which posted a 1.31% increase on the back of healthy trading in Live Cattle. However, the rise was tempered by lower returns from Lean Hogs, after a California port slowdown triggered local inventories to build up stunting pork export capabilities in the process.

Overall, the Bloomberg Commodity Index Total Return performance was negative for the month, with 17 out of 22 index constituents trading lower. Credit Suisse analysts said macroeconomic headlines became more prominent drivers of commodities returns, with fundamental supply factors driving market performers lower during March.