Where do I go to look up global commodity supplies?

April 22, 2008 5:19 AM

How do I look up current global commodity supplies? Even better, is there somewhere I can compare global commodity prices versus their supply and consumption rates over an extended period?

So we've been inundated with the 'big news' this week that commodity prices are shooting through the roof, with various theories for why this is so. One theory is that speculation and a large influx of money from investors wary of other markets is artificially driving prices up, with a counter-argument that supplies have been unable to keep up with increased demand. I know that things are undoubtedly more subtle than that, but I'm still interested in looking at some raw numbers. I have no idea how one would go about looking for this information, and a bit of googling has not lead very far.

posted by onalark to science & nature (5 comments total)

Big news this week? Prices have been sharply climbing for about one year, depending upon the market you're looking at. My private view, oft posted here on MeFi is that we're seeing just the leading edge of inflation; prices will be volatile but trending up in the intermediate term.

What is your ultimate goal? I'm not sure how helpful looking at raw data would be, but an interesting place to look at for supply side data is the National Agricultural Statistics Service's publications.

Start with the current Prospective Plantings [.pdf] .

It starts out with a nice summary, then presents table after table of interesting data. Few graphs as well, so it's not all dense and perhaps meaningless numbers (this is great stuff; your tax dollars at work).

For the hedging / speculation side, I'm not sure if there is any single source that will codify open interest in all futures contracts, along with YOY as well as daily / weekly changes.

I suspect you might have to look at the various exchanges to gather this information. I'm not sure how the pro's gather this information themselves. But I do know there are some professional commodity's traders here on MeFi, so maybe one of them will pic up on this thread.

Hope this helps!
posted by Mutant at 5:36 AM on April 22

If you're interested in some academic theories on commodity pricing & inflation I have a pile of research papers linking the two. Here are a few that may be germane to your query.

• Boughton, J., M. and Branson, W., H., 1988, "Commodity Prices as a Leading Indicator of Inflation", IMF Working Paper 81/89



• Cashin, P., A, McDermott, C. J., Scott, A., 1999, "Booms and Slumps in World Commodity Prices", IMF Working Paper No. 99/155



• Morrison P., Catherine J., MacDonald, J.M., 2003, "Tracing the Effects of Agricultural Commodity Prices and Food Costs", American Journal of Agricultural Economics, Vol. 85



• Boughton, J.,M., Branson, W.H., Muttardy, A. , 1989, "Commodity Prices and Inflation: Evidence from Seven Large Industrial Countries", NBER Working Paper No. W3158

The more I think about it, a very interesting question, specifically on the hedging / speculation side. I don't trade in the commodity markets myself (long gold & silver in my personal accounts but don't really sell), so I'm looking forward to other, more knowledgeable responses on the topic.

I realise you asked about only commodity pricing, but inflation is one of my research areas, specifically pertaining to asset bubbles / systemic mispricing of assets, and you do tend to see inflationary spikes in times of higher commodity prices, so I'm not sure you can look at just pricing to get an understanding of what's really going on.
posted by Mutant at 6:19 AM on April 22

I'm not an economist, I'm guessing I didn't phrase the question very well :) I'm interested in inflation-adjusted pricing, as you surmised.

I'm not making any investment decisions with this information, I just have a general interest in following economics and looking at some of the hard numbers myself. I just glanced through the Prospective Plantings guide and that's exactly what I was looking for. I'm definitely going to take a crack at those papers, do you recommend a particular one to read first?
posted by onalark at 7:47 AM on April 22

No, your question was fine. I only mentioned trading as I know some commodity pros are active on MeFi (we've exchanged mails in the past about some of the stronger uninformed opinions in the finance threads). Hopefully one or more of them will chime in as there is an entire practitioner dimension (aka, The Real World) that my answer won't address.

In any case, I sorta gathered from context what you wanted but wasn't totally sure. But I'm glad the NASS paper was helpful. I think they offer this data in excel format as well, which would certainly help the analysis task.

Cashin / McDermott & Scott would give a good overview of commodity pricing cycles, but it might be helpful to get some understanding / background into the business cycle at the same time - Burns & Mitchell did some of the seminal work on this topic (Burns, A., F. Mitchell, W., C., 1946, "Measuring Business Cycles", NBER Studies in Business Cycles, No.2), and its worth a read.

Boughton & Branson IMF paper would be great as a followup.

I guess after that, the Boughton / Branson & Muttardy paper presents an interesting viewpoint on commodity prices and inflation (i.e., sharp changes in prices are efficient predictors of trend changes in inflation; this paper caught my eye as years ago I did similar research into the US equity markets, looking at sharp changes in asset values during periods of relative quiescence, and found a non casual relationship).

I try to post only publicly accessible resources on MeFi; the Social Sciences Research Network is a great resource and you should be able to grab all of these papers (and more!!) from their site. But if you already have access to a University library then you're more than set. How are you fixed for data? I think DataStream will have lots of the pricing you seek, but you'll have to find a terminal.

If you've got problems finding any of those papers drop me a MeFi Mail. I should have them all in electronic form.

Have fun and if you find something interesting, don't post it here - make money on it!! Heh.
posted by Mutant at 8:57 AM on April 22

The CFTC's Commitments of Traders shows the number of traders and outstanding contracts, broken up into commercial (those who have some reason to hedge) and non-commercial (those who are speculating).

For evidence of increased speculation, look at April 2005 for CBOT corn (widely traded, common input into lots of stuff). The contracts held by non-commercial traders were about split between long and short. Today it is overwhelmingly long (around 4:1). There's also around 1/3 more non-commercial traders in that market.
posted by milkrate at 10:05 AM on April 22